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Bounce idea - >>> MEI Pharma, Inc. (MEIP), a clinical-stage pharmaceutical company, focuses on the development and commercialization of various therapies for the treatment of cancer. The company develops Zandelisib, an oral phosphatidylinositol 3-kinase delta inhibitor for the treatment of patients with relapsed/refractory follicular lymphoma; and Voruciclib, an oral cyclin-dependent kinase 9 inhibitor, which is in Phase I clinical trial for acute myeloid leukemia and B-cell malignancies. It also develops ME-344, a mitochondrial inhibitor targeting the oxidative phosphorylation complex which has completed Phase I clinical trial for the treatment of human epidermal growth factor receptor 2 negative breast cancer. MEI Pharma, Inc. has a license agreement with Presage Biosciences, Inc. The company was formerly known as Marshall Edwards, Inc. and changed its name to MEI Pharma, Inc. in July 2012. MEI Pharma, Inc. was incorporated in 2000 and is headquartered in San Diego, California.
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Jan effect bounce ideas - >>> Enanta Pharmaceuticals, Inc. (ENTA), a biotechnology company, discovers and develops small molecule drugs for the treatment of viral infections and liver diseases. Its product pipeline comprises EDP-514, which is in phase 1b clinical development for the treatment of chronic infection with hepatitis B virus or HBV; EDP-938 and EDP-323, which is in phase II clinical development for the treatment of respiratory syncytial virus; EDP-235, which is in phase II clinical development for the treatment of human coronaviruses; and Glecaprevir, which is in the market for the treatment of chronic infection with hepatitis C virus or HCV. The company has a collaborative development and license agreement with Abbott Laboratories to develop, manufacture, and commercialize HCV NS3 and NS3/4A protease inhibitor compounds, including paritaprevir and glecaprevir. Enanta Pharmaceuticals, Inc. was incorporated in 1995 and is headquartered in Watertown, Massachusetts.
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Jan effect bounce ideas -- >>> Revance Therapeutics, Inc. (RVNC), a biotechnology company, engages in the development, manufacture, and commercialization of neuromodulators for various aesthetic and therapeutic indications in the United States and internationally. The company's lead drug candidate is DaxibotulinumtoxinA for injection, which has completed phase III clinical trials for the treatment of glabellar (frown) lines and cervical dystonia; is in phase II clinical trials to treat upper facial lines, moderate or severe dynamic forehead lines, and moderate or severe lateral canthal lines; and has completed Phase II clinical trials for the treatment of adult upper limb spasticity and plantar fasciitis. It is also developing OnabotulinumtoxinA, a biosimilar to BOTOX. The company also offers Resilient Hyaluronic Acid (RHA) dermal filler for the correction of moderate to severe dynamic facial wrinkles; RHA Redensity, a dermal filler for the treatment of moderate to severe dynamic perioral rhytids; and OPUL Relational Commerce Platform, a financial technology platform. It has a collaboration and license agreement with Viatris Inc. to develop, manufacture, and commercialize onabotulinumtoxinA. The company was formerly known as Essentia Biosystems, Inc. and changed its name to Revance Therapeutics, Inc. in April 2005. Revance Therapeutics, Inc. was incorporated in 1999 and is headquartered in Nashville, Tennessee.
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Re-post -- Ally Financial - >>> Buffett's Berkshire Hathaway sees opportunity in Ally Financial amid rate hikes
By: Investing | November 22, 2023
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173277367
Warren Buffett's investment conglomerate, Berkshire Hathaway (NYSE:BRKa), maintains a significant stake in Ally Financial (NYSE: NYSE:ALLY), valued at approximately $798 million. Despite the auto financing sector being hit by rising interest rates, which has led to a decline in Ally's stock value, Berkshire Hathaway owns nearly 10% of the company. This move signals Buffett's recognition of an undervalued opportunity in the market.
Ally Financial operates a branchless digital banking model, which has been instrumental in offering competitive interest rates to customers while keeping operational costs low. This strategy has contributed to the company amassing over $161 billion in assets and achieving an impressive customer retention rate of 96%. The bank's innovative approach was rewarded with a top industry accolade this year.
Buffett is drawn to Ally due to its valuation at just 86% of tangible book value, along with its strong dividend history. Since mid-2016, Ally has increased its dividend payouts by 275%, showcasing robust financial health even as challenges persist. These challenges include tighter net interest margins and a rise in loan delinquencies, which are indicative of broader economic strain.
Nonetheless, analysts remain optimistic about Ally's future profitability, projecting an increase in earnings per share (EPS) from $3.16 in 2023 to $3.83 in 2024. The bank has also set aside $508 million for credit losses, reflecting prudent financial management during uncertain times.
Berkshire Hathaway itself boasts an impressive annual yield of around 20%, translating to cumulative returns of 3,787,464%. The firm's substantial investment in Ally Financial comes amid a period where the company's value has been slashed by half due to the impact of high-interest rates on the auto loan industry. Despite these headwinds, the consensus among Wall Street analysts supports a positive outlook for Ally Financial's path to profitability recovery.
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>>> Why NextEra Energy Stock Plunged to 3-Year Lows This Week
Motley Fool
By Neha Chamaria
Sep 29, 2023
https://www.fool.com/investing/2023/09/29/why-nextera-energy-stock-plunged-to-3-year-lows-th/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
NextEra Energy's subsidiary slashed its long-term dividend growth guidance to 5% to 8%.
NextEra Energy itself, however, still expects to grow annual dividend by 10% through 2024 at least.
The stock's fall appears unjustified and offers investors a great opportunity to buy.
What happened
Shares of NextEra Energy (NEE -8.97%) crashed this week to three-year lows and were trading 15% lower through 1:30 p.m. ET Friday, according to data provided by S&P Global Market Intelligence.
The utility giant reaffirmed its long-term earnings and dividend growth guidance through 2026, but the markets and analysts are spooked after NextEra Energy's subsidiary gave investors a nasty shock this week.
So what
NextEra Energy Partners (NEP -16.70%), a wholly owned subsidiary of NextEra Energy, slashed its annual dividend growth outlook to 5% to 8% through at least 2026, with a target growth rate of 6%. Until last month, the company was confident of growing its dividend payout by 12% to 15% through at least 2026. Management said higher interest rates were making it difficult for the company to fund its growth plans, and it can focus on "higher-yielding growth opportunities" by reducing its dividend growth target.
So while it's easy to understand why NextEra Energy Partners stock tanked this week, what does this have to do with NextEra Energy? There could be three reasons why investors are worried.
First, NextEra Energy's management also manages the subsidiary, and investors perhaps believe the latter's dividend outlook cut is a reflection of NextEra Energy's growth struggles as well.
Second, NextEra Energy Partners typically acquires renewable energy assets from its parent to grow. This week, though, it said while it'll continue to acquire assets from NextEra Energy, it'll primarily focus on revamping its existing wind energy portfolio for growth. Investors in NextEra Energy believe this will mean fewer drop-down transactions for the company and will hurt its own financing plans.
Third, lower dividends from the subsidiary will also mean less extra income for NextEra Energy.
Now what
Several analysts cut their price targets on NextEra Energy stock this week, but I believe the sharp drop in the share price is unwarranted, especially after the two announcements from the company this week that makes the stock appealing right now.
First, NextEra Energy said it will sell its Florida natural gas assets to Chesapeake Utilities for $923 million in cash. It wants to redeploy capital into core business (which could mean its electric utility and renewable energy businesses), and that sounds like a smart move.
Second, NextEra Energy is sticking with its financial goals. It expects to earn at least $2.98 and $3.23 in adjusted earnings per share (EPS) in 2023 and 2024, respectively. The company's adjusted EPS was $2.90 per share last year. For 2025 and 2026, it sees 6% to 8% growth in adjusted EPS off its 2024 range.
NextEra Energy even stated, yet again, that it will be "disappointed" if it cannot deliver numbers at or near the "top end" of its guidance range through 2026. The company also expects to grow its dividend per share by around 10% annually through at least 2024.
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>>> RTX Corporation (RTX) -- Considering that RTX Corporation (NYSE:RTX) is near 52-week lows, it might be an opportunity to buy one of the best defense stocks. After announcing its second-quarter results, the stock declined by over 10%. The negative reaction was triggered by an issue with its Pratt & Whitney engines.
https://finance.yahoo.com/news/3-best-defense-stocks-buy-210423930.html
Reuters reported that RTX had discovered a defect in 1,200 engines. Microscopic contaminants in the powdered metal in high-pressure turbine discs could cause micro-cracks. As a result, the affected engines must be grounded for inspection over the next year. This was a setback for the company’s ambition to conquer the jet engine market.
But looking at the rest of the second quarter report, the results were impressive. Sales were up 12% YOY and 13% on an organic basis. The Collins Aerospace, Pratt & Whitney and Raytheon Missiles & Defense segments reported 17%, 15% and 12% YOY growth rates, respectively. Meanwhile, the total backlog was a healthy $185 billion — $112 billion commercial and $73 billion defense.
Net income from continuing operations was 1.3 billion, a 2% YOY increase. Additionally, adjusted EPS grew 11% YOY to $1.29. The company also repurchased $596 million of RTX shares in the quarter.
Management highlighted the strong momentum and raised their outlook. “Based on the strong performance year-to-date and strong end-markets, we are raising our full year sales outlook and tightening our adjusted EPS* outlook,” said CEO Greg Hayes.
For FY2023, management expects adjusted EPS of $4.95 – $5.05. Considering a midpoint EPS of 5, the stock trades at 16 times forward price-to-earnings. Buy the world’s largest aerospace and defense company at these bargain prices.
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>>> The Hershey Company -- Halloween is just around the corner, and kids will be eager to fill their bags with candy, including some from one of the world's largest chocolate manufacturers, The Hershey Company (HSY). Despite experiencing a nearly 7% decline in 2023, Hershey's stock has delivered an impressive total return of 122% over the past five years, far outpacing the S&P 500's 68% total return.
https://www.fool.com/investing/2023/09/17/3-top-dividend-stocks-to-buy-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Management recently raised its quarterly dividend by 15% to $1.192 per share, resulting in an impressive yield of 2.3%. And Hershey has raised its quarterly dividend every year since 1972, except for 2009, during the Great Recession.
In recent years, Hershey has expanded its portfolio into snacks by acquiring SkinnyPop and Dot's Homestyle Pretzels. As a result, the company's revenue and net income are hitting record highs. Management recently reaffirmed its guidance for 8% revenue growth for 2023 versus 2022, resulting in net sales of roughly $11.2 billion, compared to $10.4 billion in 2022.
Despite Hershey's strong projected revenue growth, the stock might be experiencing a sell-off because the source of this growth is primarily price increases rather than increased sales volume. The company's second-quarter results show an average price increase of 7.7% for its products, coupled with a 2.7% decrease in sales volume from a year ago.
These price hikes are a result of the historically high costs of essential ingredients such as cocoa and sugar. However, Hershey boosted its gross margins by an impressive 3.4% year over year, reaching 45.5%.
This margin expansion could indicate that Hershey is becoming more efficient in managing its cost of goods sold. If cocoa and sugar prices return to normal levels, this efficiency could lead to further margin expansion, resulting in increased profitability for the company.
In summary, Hershey faces notable inflationary pressures and a potential decrease in consumption. Nevertheless, the stock currently looks undervalued when considering its historical P/E, which has averaged 26.3 over the past five years. With a forward P/E of 22.2, Hershey presents a potential investment opportunity at an attractive valuation.
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>>> Aspen Technology, Inc. (AZPN) provides enterprise asset performance management, asset performance monitoring, and asset optimization solutions worldwide. The company's solutions address complex environments where it is critical to optimize the asset design, operation, and maintenance lifecycle. It offers artificial intelligence of things, aspen hybrid models, asset performance management, OSI digital grid management, and performance engineering; production optimization for commodity polymers, olefins, refining, and specialty chemicals; subsurface science and engineering; and value chain optimization for energy and polymers and specialty chemicals solutions. The company serves bulk chemicals, consumer packaged goods, downstream, food and beverage, metals and mining, midstream and LNG, pharmaceuticals, polymers, pulp and paper, specialty chemicals, transportation, upstream, and water and wastewater industries; power generation, transmission, and distribution industries; and engineering, procurement, and construction industries. Aspen Technology, Inc. was incorporated in 2021 and is headquartered in Bedford, Massachusetts.
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>>> StoneCo (STNE) is a leading provider of payment-processing services in Brazil. Admittedly, it's also been a provider of lending services that have heavily underperformed. While it occupies a very small position in Berkshire's total stock portfolio, the company has the distinction of being one of the few fintech companies that the investment conglomerate is invested in.
https://www.fool.com/investing/2023/04/25/2-top-warren-buffett-stocks-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
In addition to macroeconomic pressures that have generally been quite hard on fintech stocks, StoneCo's valuation has been pressured due to bad debt held by its credit business. The company had been relying on Brazil's national registry system to guide its loan underwriting, and this created issues as the COVID-19 pandemic and other issues drove business failures and pushed the value of StoneCo's loan book into negative territory.
As a result of these challenges, the company's share price is down approximately 88% from its all-time high. But at current prices, the stock looks like a worthwhile buy for risk-tolerant investors.
At the end of the fourth quarter, StoneCo estimated that it still had 398.7 million Brazilian reals (roughly $79 million based on today's exchange rate) in bad debt on its books, but the company has discharged or sold off most of its bad debt. More importantly, its core payment-processing services segment continued to serve up strong results.
Primarily driven by its payments business, StoneCo managed to grow revenue 44% year over year in Q4. The company's non-GAAP (adjusted) net income also came in ahead of expectations at $46.4 million, up from a loss of $6.4 million in Q4 2021.
While the business has been growing at a rapid clip, it's still valued at roughly 18 times this year's expected earnings and 1.5 times expected sales. Based on its recent earnings trajectory, StoneCo's adjusted earnings could feasibly cover the remaining bad debt on its books this year, and the business still has plenty of room for growth ahead.
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>>> Better AI Stock: Nvidia vs. C3.ai
Motley Fool
By Leo Sun
Apr 18, 2023
https://www.fool.com/investing/2023/04/18/better-ai-stock-nvidia-vs-c3-ai/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
C3.ai has a catchy ticker symbol, but its business has some glaring problems.
Nvidia will remain one of the best chip plays in the AI market, but a lot of that optimism has already been baked into its share price.
Both of these stocks are pricey, but one is clearly a better long-term investment.
Nvidia (NVDA 3.09%) and C3.ai (AI -0.57%) both believe they will benefit from the expansion of the artificial intelligence (AI) market, which recently gained a lot of attention with the rise of "generative AI" platforms like ChatGPT. Nvidia's top-tier GPUs are used to process complex machine learning and AI tasks in data centers, while C3.ai's algorithms add AI capabilities to an organization's existing applications.
Nvidia and C3.ai have rallied about 83% and 96%, respectively, so far this year as the bulls rush toward AI-related stocks. But will those gains be sustainable over the long term? Let's take a closer look at these two companies to decide.
C3.ai: A catchy name with a shaky business
C3.ai was previously known as C3 Energy and C3 IoT (Internet of Things) before it rebranded itself as C3.ai in 2019. It subsequently generated a lot of buzz with that catchy name and its "AI" ticker symbol when it went public in late 2020.
But underneath those rebrandings, C3's core business hasn't changed all that much since its days as C3 Energy and C3 IoT. It still generates most of its revenue from the energy sector, and a massive joint venture with Baker Hughes still accounts for more than 30% of its revenue. That's deeply troubling because that agreement will expire in fiscal 2025 (which will end in April 2025), and there's no guarantee it will be renewed.
Last year, C3 also pivoted from subscriptions toward a usage-based model, which only collects fees when its services are accessed. The company insists that move will counter the macroeconomic headwinds that are discouraging enterprise customers from locking themselves into sticky subscriptions, but it's also severely throttling its near-term growth.
C3's algorithms can be plugged into an organization's software to automate tasks, cut costs, improve employee safety, and detect fraud -- but those optimization tools aren't comparable to OpenAI's ChatGPT or other generative AI platforms. C3 gained a lot of attention this January when it announced the development of new tools for generative AI platforms, but that merely means its algorithms are compatible with those platforms and doesn't guarantee any future revenue.
C3's revenue rose 38% in fiscal 2022, but it only anticipates 4% to 5% growth in fiscal 2023. It's still deeply unprofitable by both generally accepted accounting principles (GAAP) and non-GAAP measures, and it isn't cheap, with an enterprise value of 7 times its estimated sales for fiscal 2023. In that light, C3 still seems like a risky stock that could easily be cut in half once the AI hype dies down.
Nvidia: The pick-and-shovel play of the AI market
Nvidia's business is built on a much firmer foundation than C3. It's the largest producer of discrete GPUs in the world, and its top-tier GPUs are widely used by generative AI platforms like ChatGPT to accelerate their AI processing capabilities.
Nvidia experienced a major growth spurt during the pandemic as consumers upgraded their gaming PCs to play more video games, sales of pre-built PCs soared as more people worked remotely and attended remote classes, and data centers upgraded their servers to process more cloud-based data. The spike in cryptocurrency prices amplified that surge as crypto miners upgraded their mining rigs with Nvidia's latest GPUs.
The company's growth cooled off after the pandemic waned. PC sales withered, macro headwinds forced data centers to rein in their spending, and the collapse of the cryptocurrency market caused miners to flood the market with secondhand GPUs.
Nvidia's revenue came in flat in fiscal 2023 (which ended this January), compared to its 61% growth in fiscal 2022, as its adjusted EPS fell 25%. However, analysts expect its revenue and earnings to grow 11% and 35%, respectively, in fiscal 2024 as it laps that slowdown, the growth of the AI market boosts its data center sales, and the crypto market recovers.
That outlook is encouraging, but Nvidia's stock still looks pricey at 60 times forward earnings. That frothy valuation suggests it's also being buoyed by all the recent generative AI hype -- and a harsh reality check could easily crush its shares. But looking beyond the valuation, Nvidia's core business is still stable, it has a wide moat, it's firmly profitable by both GAAP and non-GAAP measures, and it will likely remain an essential pick-and-shovel play on the high-end gaming and AI markets.
The obvious winner: Nvidia
I wouldn't touch either of these stocks until their valuations cool off. But once that happens, Nvidia will obviously be a better buy than C3.ai. C3 isn't doomed yet, but it raises too many red flags given its habit of chasing hot trends, decelerating growth, lack of profits, and overwhelming dependence on Baker Hughes.
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C3.ai (AI) - >>> If the AI industry does create $90 trillion in enterprise value by 2030, C3.ai (AI) could be set for explosive growth given the company is valued at just $2.5 billion right now. It's a first-of-its-kind enterprise AI company -- in fact, it pioneered the industry.
https://www.fool.com/investing/2023/04/16/2-ai-stocks-could-share-90-trillion-value-by-2030/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
C3.ai develops AI applications for its business customers, whether they need a ready-made solution or something entirely custom. Those customers operate across 14 industries including oil and gas, manufacturing, healthcare, financial services, and even the U.S. government. By using C3.ai, companies can accelerate their adoption of this advanced technology rather than building it from scratch, which can consume a significant amount of time and resources.
C3.ai's progress in AI is also recognized by some of the world's largest tech giants. It now sells AI applications jointly with Amazon Web Services, Microsoft Azure, and Alphabet's Google Cloud. Those cloud providers use C3.ai to improve their own product offerings to customers. For example, a business can develop AI applications 26 times faster with C3.ai on AWS compared to using AWS alone.
Investors should be aware of a couple of things before buying C3.ai stock. First, its revenue growth has stalled because the company is in the middle of transitioning away from subscription-based pricing to consumption-based pricing. It will eliminate lengthy negotiations and convoluted onboarding processes when acquiring new customers, and C3.ai expects revenue growth to come in at 30% from fiscal 2024 onward.
Second, the company was recently called out by a short seller for discrepancies in its financial statements, mainly relating to how revenue is being recorded. C3.ai hasn't responded yet, and it may feel confident enough in its position that a response isn't warranted, but it's something to be wary of, nonetheless.
C3.ai has been a volatile stock since it listed publicly in December 2020, quickly reaching an all-time high of $161 amid the red-hot tech market. But it has since crashed by 85% as investors began to sour on technology stocks, and because the company failed to deliver on growth expectations. For investors seeking exposure to the potential value creation AI has to offer, and who have an appetite for risk, it might be worth taking a small position in C3.ai stock.
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>>> Omnicell, Inc.(OMCL), together with its subsidiaries, provides medication management solutions and adherence tools for healthcare systems and pharmacies the United States and internationally. The company offers point of care automation solutions to improve clinician workflows in patient care areas of the healthcare system; XT Series automated dispensing systems for medications and supplies used in nursing units and other clinical areas of the hospital, as well as specialized automated dispensing systems for operating room; Omnicell Interface Software that offers interface and integration between its medication-use products or supply products, and a healthcare facility's in-house information management systems; and robotic dispensing systems for handling the stocking and retrieval of boxed medications. It also provides central pharmacy automation solutions; IV compounding robots and workflow management systems; inventory management software; and controlled substance management systems. In addition, the company provides single-dose automation solutions that fill and label a variety of patient-specific, single-dose medication blister packaging based on incoming prescriptions; fully automated and semi-automated filling equipment for institutional pharmacies to warrant automated packaging of medications; and medication blister card packaging and packaging supplies to enhance medication adherence in non-acute care settings. Further, it offers EnlivenHealth Patient Engagement, a web-based nexus of solutions. The company was formerly known as Omnicell Technologies, Inc. and changed its name to Omnicell, Inc. in 2001. Omnicell, Inc. was incorporated in 1992 and is headquartered in Santa Clara, California.
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Omnicell - >>> Should You Hold Omnicell (OMCL) for the Long-Term?
Insider Monkey
March 17, 2023
by SOUMYA ESWARAN
https://www.insidermonkey.com/blog/should-you-hold-omnicell-omcl-for-the-long-term-1132412/
Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 4.69% (net) compared to a 4.72% return for the Russell 2500 Growth Index. Positive factors during the quarter helped the fund’s performance. An emphasis on quality was beneficial for the fund in the upmarket. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Meridian Growth Fund highlighted stocks like Omnicell, Inc. (NASDAQ:OMCL) in the Q4 2022 investor letter. Headquartered in Mountain View, California, Omnicell, Inc. (NASDAQ:OMCL) is a medication management solutions and adherence tools provider for healthcare systems. On March 16, 2023, Omnicell, Inc. (NASDAQ:OMCL) stock closed at $56.97 per share. One-month return of Omnicell, Inc. (NASDAQ:OMCL) was 5.48%, and its shares lost 58.47% of their value over the last 52 weeks. Omnicell, Inc. (NASDAQ:OMCL) has a market capitalization of $2.563 billion.
Meridian Growth Fund made the following comment about Omnicell, Inc. (NASDAQ:OMCL) in its Q4 2022 investor letter:
“Omnicell, Inc. (NASDAQ:OMCL), develops medication management systems for healthcare systems and retail pharmacies in the U.S. and internationally. Its offerings consist of hardware and software components and are used by customers ranging from robot central pharmacies to hospitals that deploy automated dispensing systems such as bedside cabinets. We believe Omnicell’s market-leading position holds attractive growth potential, especially as we anticipate healthcare systems and pharmacy operators will remain aggressively cost-conscious. The stock slumped during the quarter as the company lowered its near-term revenue and profit targets due primarily to two key factors. First, the implementation of completed deals slowed, bogged down by industry labor shortages and an overly active respiratory illness season that prompted customers to extend their plans by three to six months. Second, the company experienced a slowdown in capital budgeting decisions by over-stressed hospitals, which resulted in a decline in new bookings and awarded contracts. Despite the near-term challenges, we continue to believe in Omnicell’s potential and maintained our position during the quarter.”
Omnicell, Inc. (NASDAQ:OMCL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Omnicell, Inc. (NASDAQ:OMCL) at the end of the fourth quarter which was 23 in the previous quarter.
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>>> Should You Hold Omnicell (OMCL)?
Insider Monkey
by Soumya Eswaran
Mar 20, 20233
https://finance.yahoo.com/news/hold-omnicell-omcl-070426040.html
Brown Capital Management, an investment management company, released its “The Brown Capital Management Mid Company Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. The Mid Company Fund returned 5.43% in the quarter compared to a 6.90% return for the Russell Midcap Growth Index. For the full year, the fund declined 37.12% compared to a -26.72% return for the benchmark. In addition, check the fund’s top five holdings to know its best picks in 2022.
The Brown Capital Management Mid Company Fund highlighted stocks like Omnicell, Inc. (NASDAQ:OMCL) in the Q4 2022 investor letter. Headquartered in Santa Clara, California, Omnicell, Inc. (NASDAQ:OMCL) is a medication management solutions and adherence tools provider for healthcare systems. On March 17, 2023, Omnicell, Inc. (NASDAQ:OMCL) stock closed at $55.60 per share. One-month return of Omnicell, Inc. (NASDAQ:OMCL) was 2.94%, and its shares lost 59.47% of their value over the last 52 weeks. Omnicell, Inc. (NASDAQ:OMCL) has a market capitalization of $2.563 billion.
The Brown Capital Management Mid Company Fund made the following comment about Omnicell, Inc. (NASDAQ:OMCL) in its Q4 2022 investor letter:
"Omnicell, Inc. (NASDAQ:OMCL) provides medication-management automation solutions for healthcare providers and pharmacies. Its tools include both hardware and software. Omnicell shares underperformed as the company took down fiscal year 2022 guidance 8% due to implementation delays and elongated sales cycles. More importantly, fiscal year 2022 bookings guidance was reduced $400 million, or 28%, as product bookings related mostly to one of the company’s products failed to materialize. However, our research suggests that this slowdown is being driven by a market-wide freeze in hospital capital expenditures, rather than by a company-specific issue. In addition, the mission-critical nature of Omnicell’s products that will replace/upgrade older versions is a priority over the next few years for hospitals. The company is well-positioned longer-term to become hospitals’ trusted partner for pharmacy safety, automation, earnings and strategy. Omnicell has one of the leading platforms for acute-care pharmacy services in the market. Moreover, November volumes for hospitals did improve, but we are not yet calling this the turning point for Omnicell. In short, inflation and lower hospital capital expenditures will likely weigh on the company in the near term. As care moves to retail and ambulatory sites, hospitals will need to partner with innovative companies like Omnicell in order to compete effectively. The company has an addressable market of about $90 billion and has created one of the largest and probably the best product suite on the market.
Omnicell operates primarily in the U.S., which has an aging population and the highest pharmaceutical spending per capita in the world. Omnicell’s products are positioned across the continuum of care, which gives it unique access to patient and hospital data. Nevertheless, we are revisiting our initial investment thesis to ensure that the company can deliver on our longer-term expectations."
Omnicell, Inc. (NASDAQ:OMCL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Omnicell, Inc. (NASDAQ:OMCL) at the end of the fourth quarter which was 23 in the previous quarter.
We discussed Omnicell, Inc. (NASDAQ:OMCL) in another article and shared Meridian Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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>>> Stanley Black & Decker, Inc. (NYSE:SWK) - Number of Hedge Fund Holders: 25
https://finance.yahoo.com/news/14-stocks-pop-according-jim-150048076.html
6-Month Performance as of March 30 (Relative to SPY): -11.73%
One of Cramer's top stock picks from October was Stanley Black & Decker, Inc. (NYSE:SWK). He called the stock a "fantastic brand name" and "everybody's go-to toolmaker". As of March 30, Stanley Black & Decker, Inc. (NYSE:SWK) has lost 11.73% over the past 6 months, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
25 hedge funds held stakes in Stanley Black & Decker, Inc. (NYSE:SWK) at the end of the fourth quarter of 2022. The total value of these stakes amounted to $493.9 million. As of December 31, D E Shaw is the largest investor in the company and holds a position worth $111.3 million.
Ariel Investments made the following comment about Stanley Black & Decker, Inc. (NYSE:SWK) in its Q3 2022 investor letter:
“Shares of Stanley Stanley Black & Decker, Inc. (NYSE:SWK) sharply declined in the quarter as inflation and rapidly rising rates drove a swift deterioration in consumer demand. In response, SWK is laser-focused on reducing inventory to generate cash flow and re-sizing the cost base through simplifying its corporate structure, optimizing operations and transforming the supply chain. Though the macroeconomic backdrop remains challenging, we have conviction in SWK’s experienced executive management team and think the balance sheet is well-positioned to weather the storm. At current levels, SWK is trading at a substantial, historically-high discount to our estimate of private market value.”
While Stanley Black & Decker, Inc. (NYSE:SWK) has underperformed over the past 2 quarters, Cramer's picks that have outperformed the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) over the past 6 months include ServiceNow, Inc. (NYSE:NOW), Yum! Brands, Inc. (NYSE:YUM), and JPMorgan Chase & Co. (NYSE:JPM).
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>>> Generac Holdings Inc. (NYSE:GNRC) - Number of Hedge Fund Holders: 31
https://finance.yahoo.com/news/14-stocks-pop-according-jim-150048076.html
6-Month Performance as of March 30 (Relative to SPY): -47.00%
One of Jim Cramer's top picks from October 2022 was Generac Holdings Inc. (NYSE:GNRC). The company is an American manufacturer of backup power generation facilities Cramer said that the he liked how low the stock was, enough to add it to his charitable trust. Shares of Generac Holdings Inc. (NYSE:GNRC) have lost 47% over the past 6 months, relative to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), as of March 30.
At the end of Q4 2022, 31 hedge funds were bullish on Generac Holdings Inc. (NYSE:GNRC) and held stakes worth $588.2 million in the company. Of those, Ariel Investments was the top investor in the company and held a stake worth $132 million.
Meridian Funds made the following comment about Generac Holdings Inc. (NYSE:GNRC) in its Q4 2022 investor letter:
“Generac Holdings Inc. (NYSE:GNRC), is a manufacturer of power generation equipment with a leading position in home standby generators. Generac also offers consumers a home energy management system that harnesses and stores power from the sun to be used for backup during utility power outages. Severe weather events that strained already-overburdened power grids in California, Texas, and other key markets have created a significant opportunity for home power generation equipment manufacturers. Moreover, with the future potential to aggregate these distributed energy resources through the company’s grid services business, homeowners have the potential to monetize these assets. The stock declined during the quarter as the company reduced its full-year revenue guidance due largely to labor shortages in Generac’s dealer network which resulted in a slowdown in installations and implementations. As a consequence, dealers have reduced their on-site inventory. During the period, we exited our position in the company.”
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>>> StoneCo stock has explosive potential -
https://www.fool.com/investing/2023/04/11/2-stocks-down-more-than-75-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Keith Noonan: StoneCo (STNE 3.09%) is a Brazil-based payment processing and lending company that's seen volatile trading over the last few years. To be more descriptive, it's a fintech services provider with thriving payment solutions for small and medium-sized businesses and a credit business that was crushed by headwinds related to the coronavirus pandemic and flaws in Brazil's national registry system, which was used for loan underwriting.
Even after discharging or selling off much of its credit portfolio at basement-level prices, StoneCo still carries roughly $79 million in bad debt on its books. Due to macroeconomic pressures and the collapse of the credit business, the company's share price is down approximately 91% from its high. But there's an opportunity here.
StoneCo's fourth-quarter earnings report arrived with strong performance for the core payments business and signs the company is emerging from challenges created by its credit business. Sales and earnings performance for the period beat both internal guidance and the average analyst estimates, with revenue growing 44% year over year and non-GAAP (adjusted) net income swinging into positive territory at $46.4 million from a loss of $6.4 million in the prior-year period.
While StoneCo shouldn't be thought of as a low-risk stock, the market appears to be too pessimistic about the company, and it trades at multiples that leave room for explosive upside.
Valued at less than 15 times expected earnings for this year and less than 1.3 times expected sales, the Brazilian fintech services provider offers an attractive risk-reward proposition at current prices. If macroeconomic pressures ease and the company maintains solid footing in its corner of Brazil's payment-processing space, the stock stands a very good chance of delivering strong returns.
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>>> Palantir Expands Microsoft Cloud Computing Pact To Government Agencies <<<
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171640997
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>>> GE stock has skyrocketed 80% in 5 months — JPMorgan says that's a problem
Yahoo Finance
Brian Sozzi
March 7, 2023
https://finance.yahoo.com/news/ge-stock-jpmorgan-says-thats-a-problem-120604299.html
JPM thinks GE's stock (GE) could power down in the months ahead after a sizzling five-month run.
"While we see an excellent business in aerospace and potential in Vernova, GE is up ~80% over the past five months vs. 13% for the S&P 500," JPMorgan analyst Seth Siefman wrote in a client note on Tuesday ahead of a hotly anticipated March 9 GE investor day. "Our sum of the parts-based December 2023 price target therefore leaves limited upside."
Siefman has a Neutral rating on the stock of the industrial icon, which is in the process of splitting up into several parts. Long-time market-moving GE analyst Steven Tusa is no longer running point on the name.
The company is being divided into three separate companies — aviation, healthcare, and energy — in a plan unveiled late in 2021. GE Healthcare (GEHC) was spun off into a public company in January of this year. The energy business — dubbed Vernova — is slated to debut on the public market by early 2024.
"This is my one-year anniversary with the company, and people have been super energized about our opportunity to be separate," GE Healthcare CEO Peter Arduini told Yahoo Finance Live on January 4. "It's brought more employees of capabilities into the company."
Siefman thinks investors may be overlooking a few important risks on GE's stock as they plow into a re-vamped company which on paper should be more focused and leaner, potentially leading to better profits.
"On the aerospace side, GE and others are clearly benefiting from a Goldilocks environment for maintenance where global travel demand is surging and Boeing and Airbus cannot build enough new planes," Siefman explained. "Air travel demand has been quite resilient but if it comes under pressure, the aftermarket growth outlook would suffer and there is also a threat from the gradual ramp in new aircraft deliveries eating into maintenance activity."
In terms of the energy business, Siefman added, "the scale of the EBITDA and FCF growth required at Renewables is a natural focus for investors, particularly with near-term challenges likely to persist and Vernova’s success will depend to some degree on yet-to-be-determined mechanisms of the IRA. Lingering Insurance exposure is another risk — and an opaque one — in part because GE may be unable to unload Insurance, leaving the potential for incremental contributions."
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>>> Why Generac Holdings Stock Topped the Market on Thursday
Motley Fool
By Eric Volkman
Feb 2, 2023
https://www.fool.com/investing/2023/02/02/why-generac-holdings-stock-topped-the-market-on-th/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
The company's recovery continued, despite an analyst's price-target cut.
The stock has been an up-and-down title since the heaviest days of the coronavirus pandemic.
.
What happened
The stock market was quite frothy on Thursday, and Generac Holdings (GNRC 3.49%) was one of the stocks pushing it higher. The power-generating technology company's stock price rose by 3.5%, well outpacing the 1.5% rise of the bellwether S&P 500 index. The beaten-down stock is continuing its recent comeback.
So what
Momentum is clearly on Generac's side. Thursday morning before the market open, Credit Suisse analyst Maheep Mandloi cut his price target on the stock to $159 per share from the previous level of $165. That didn't keep investors away from the shares at all. In fact, during the day, they dipped only slightly and briefly below their Wednesday price.
Investor optimism is supporting Generac's stock, bolstered by some encouraging news in recent days from the company. It unveiled a new product that's well-timed to jump on the snowballing popularity of electric vehicles (EVs) -- a home charging system.
It sounds quite promising, too. According to its maker, the Generac EV charger can provide a full charge for certain cars in four to six hours, a quick little sprint in time, compared to other charging solutions. The appeal of such a product in a growing market is obvious.
Now what
Another dynamic at play here is the low base of Generac's shares as they tumbled into 2023. The stock was one of the worst-performing titles in its sector last year. That was basically a retrenchment, as Generac -- with its robust home generator business -- was a popular title during the stay-at-home period that was the thick of the coronavirus pandemic.
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>>> Scotts Miracle-Gro posts narrower-than-expected net loss and beats revenue mark
MarketWatch
Feb. 1, 2023
By Steve Gelsi
https://www.marketwatch.com/story/scotts-miracle-gro-posts-narrower-than-expected-net-loss-and-beats-revenue-mark-01675254093?siteid=yhoof2
Scotts Miracle-Gro. Co. SMG, said Wednesday its first-quarter loss widened to $64.7 million, or $1.17 a share, from a loss of $50 million, or 90 cents a share in the year-ago quarter.
The lawn and cannabis growing products company’s adjusted loss widened to $1.02 a share from 88 cents a share in the year-ago period. Revenue fell 7% to $526.6 million. Analysts expected Scotts Miracle-Gro to lose $1.34 a share on revenue of $502.4 million, according to estimates compiled by FactSet.
Scotts Miracle-Gro said it’s targeting $185 million in annualized savings for an initiative called project springboard. The company also reported record December shipments in its U.S. Consumer business that “contributed to a strong early season buildout demonstrating confidence in the lawn and garden season.”
First-quarter sales in its Hawthorne cannabis growing product unit fell 31% to $131.5 million, compared with $190.6 million, due to “challenges” in the industry, the company said.
Looking ahead, Scotts Miracle-Gro is projecting 20% to 30% lower sales for Hawthorne in fiscal 2023. Shares of Scotts Miracle-Gro are up 48.6% in 2023, compared to a 10.7% rise by the Nasdaq.
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>>> Should you add West Pharmaceutical Services (WST) Shares to Your Portfolio?
Insider Monkey
October 25, 2022
by SOUMYA ESWARAN
https://www.insidermonkey.com/blog/should-you-add-west-pharmaceutical-services-wst-shares-to-your-portfolio-1079317/
Baron Funds made the following comment about West Pharmaceutical Services, Inc. (NYSE:WST) in its Q3 2022 investor letter -
“West Pharmaceutical Services, Inc. (NYSE:WST) manufactures components and systems for the packaging and delivery of injectable drugs. Its shares fell on investor concerns about a decline in the company’s COVID-related revenue because of a drop in vaccine demand and a slowdown in the shift to packing vaccines in single-use vials and syringes. Once its inherently volatile COVID related revenue stabilizes, we believe West’s stock will perform well, driven by healthy demand drivers in its base business that depends on a widely diversified group of primarily biologic drugs.”
West Pharmaceutical Services, Inc. (NYSE:WST) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held West Pharmaceutical Services, Inc. (NYSE:WST) at the end of the second quarter, which was 35 in the previous quarter.
We discussed West Pharmaceutical Services, Inc. (NYSE:WST) in another article and shared the best American dividend stocks to buy. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
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>>> Ecolab Inc. (ECL) provides water, hygiene, and infection prevention solutions and services in the United States and internationally. The company operates through Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences segments. The Global Industrial segment offers water treatment and process applications, and cleaning and sanitizing solutions to manufacturing, food and beverage processing, transportation, chemical, metals and mining, power generation, pulp and paper, commercial laundry, petroleum, refining, and petrochemical industries. The Global Institutional & Specialty segment provides specialized cleaning and sanitizing products to the foodservice, hospitality, lodging, government and education, and retail industries. Its Global Healthcare & Life Sciences segment offers specialized cleaning and sanitizing products to the healthcare, personal care, and pharmaceutical industries, such as infection prevention and surgical solutions, and end-to-end cleaning and contamination control solutions under the Ecolab, Microtek, and Anios brand names. The company's Other segment offers pest elimination services to detect, eliminate, and prevent pests, such as rodents and insects in restaurants, food and beverage processors, educational and healthcare facilities, hotels, quick service restaurant and grocery operations, and other institutional and commercial customers. This segment also provides colloidal silica for binding and polishing applications in semiconductor, catalyst, and aerospace component manufacturing, as well as chemical industries; and products and services that manage wash process through custom designed programs, premium products, dispensing equipment, water and energy management, and reduction, as well as real time data management. It sells its products through field sales and corporate account personnel, distributors, and dealers. The company was founded in 1923 and is headquartered in Saint Paul, Minnesota.
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>>> Trex Company, Inc. (TREX) manufactures and distributes decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. The company operates in two segments, Trex Residential and Trex Commercial. It offers decking products under the names Trex Transcend, Trex Select, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; and Trex Signature aluminum railing for a contemporary look. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. In addition, it designs, engineers, and markets architectural and aluminum railing systems, and staging equipment and accessories for the commercial market, as well as sports stadiums and performing arts venues. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, Cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe's stores, as well as through its direct sales staff, independent sales representatives, and bidding on projects. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.
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Lemonade Insurance $LMND over 22% Short Float per Finviz dot com
Warren Buffett $BRK once had half his entire portfolio invested in GEICO. Now Lemonade $LMND is cannibalizing GEICO & the rest State Farm, Liberty Mutual, and their silly ADs. US News and JD Powers show $LMND customer service has very high ratings. $LMND market costs are 1.10th that of peers. $LMND investors day CEO and CFO Tim Bixby stated $LMND will crush costs and turn the trigger on profitability. Short Float still way up per www.finviz.com Just like Amazon when they were loosing money but laying the pipe to a trillion dollar market. Big difference with $LMND & $AMZN is $LMND Market is a MUST HAVE if you own home, pet, auto. $LMND two biggest deals of 2022 have yet to create fruity but will in 2023; Chewy deal cost no cash gives $LMND an API into 20M Chewy Pet customers. Pet Customers are more affluent and $LMND pick up the power of insurance bundle and cross selling. Metromile acquisition is just beginning to create fruit but $LMND other insurance products will cross sell into 1m Auto Insurance Customers. All investors need to do their own due diligence.
Generac - >>> Could the Worst Stock in the S&P 500 in 2022 Be a Buy in 2023?
Motley Fool
By Michael Byrne
Jan 15, 2023
https://www.fool.com/investing/2023/01/15/could-the-worst-stock-in-the-sp-500-in-2022-be-a-b/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Generac stock got crushed in 2022, and plummeted even further in the fall after management cut its guidance.
The company is still growing at an impressive clip.
Generac's valuation now looks a lot more palatable.
While the whole market was down in 2022, few stocks had a worse year than Generac (GNRC 3.01%). In fact, with a decline of 71%, it was the worst performer of the year in the S&P 500.
The maker of backup generators and other power-generating devices was a high flyer for much of 2021, when its market cap essentially doubled. But the stock began to decline after peaking in late 2021 and went on to lose an incredible 71% of its value in 2022. Generac investors are licking their wounds after a terrible 2022, but is there any reason for optimism that the beleaguered stock can bounce back in 2023?
I've got the power
Generac is best known for its generators which serve the residential and commercial markets. In recent years, it has also increasingly used acquisitions to diversify into additional areas like solar, battery storage, and energy management systems. The company has a great track record of long-term revenue growth, increasing sales at an outstanding 18% compound annual rate since going public in 2010.
It's the undisputed heavyweight in home generators, with a market share of about 75%. However, it still has a long runway for growth ahead as it estimates that this market is only 5.5% penetrated. Management sees further growth in home standby generation as a significant opportunity, and it's feasible that the severe winter storms of December 2022, which caused millions of customers across 13 states to lose power, will reinforce homeowners' interest in having backup power sources. Generac says that every additional percentage point of penetration for backup generators adds an additional $2.5 billion in addressable market for the company.
While this is a large opportunity in its core market, Generac also says that the acquisitions it has made over the past few years have expanded the size of its served addressable market by 500% since 2018. The company now makes inverters, which convert the DC electricity that solar panels generate into AC electricity -- the type that the grid supplies and our homes and businesses use. That's a market with potential -- solar power's installed capacity is expected to grow at a 12.7% compound annual rate over the next five years.
Beyond solar, the company has also moved into battery-powered lawnmowers with the acquisition of Mean Green, smart-home solutions with the acquisition of Ecobee, and more. If Generac can capture more market share in some of these new markets, it could add significantly to the company's growth in the years ahead.
Lower expectations create an attractive valuation
While Generac was punished for its sharp reduction in guidance, it's important to note that it hasn't suddenly turned into a slow-growth or no-growth company. This is still a profitable business, and the company still expects to report that it grew revenue by 22% to 24% in 2022. That isn't as compelling as the 36% to 40% it originally guided for, but it's still pretty impressive growth.
In some ways, Generac has been a victim of its own success, as the stock surged past $500 in October 2021 on the back of terrific growth. But as it lapped those difficult comps from 2021, its growth rate slowed, and the stock fell to just below $100 a share as of the end of 2022.
The stock contended with additional challenges over the course of the year, such as a lack of technicians to install its generators. The company now has partnerships with 8,500 dealers (300 more than the previous quarter), so it is working chip away at this challenge, and it says demand remains strong. Additionally, Generac dealt with a major customer declaring bankruptcy.
One area for concern is that the company's debt has increased significantly in recent times while its cash has decreased as it has pursued acquisitions. Total debt outstanding went from about $882 million in September of 2020 to over $1.3 billion as of the most recent quarter. The company now has a debt to EBITDA ratio of about 2.15. While this isn't egregious, it is something for investors to keep an eye on.
At this point, Generac's valuation looks undemanding. The stock trades at 15 times earnings and 14 times forward earnings, putting it just below the average multiple for the S&P 500.
Generac is actively engaging in share repurchases, and the company's Board recently authorized a new share repurchase program that will allow the company to buy back up to $500 million worth of its stock over the next two years.
With this lower valuation, and against a backdrop of lowered expectations, and more share buybacks on deck the stock looks a lot more palatable as a buy.
This won't be the worst stock in the S&P 500 again
Given the company's track record of growth and the long potential runway ahead of it, it seems likely that the present issues aret a speed bump on the road to Generac's long-term success. These lower prices offer investors a potentially favorable entry point. Janney Scott Mongomery recently initiated coverage of the stock with a buy rating, while Northland Capital went a step further, calling Generac its top pick of 2023.
Both analyst firms are of the opinion that the shares are undervalued, and Northland Capital thinks that the recent series of high-profile power outages across the United States could spur demand for home standby generators. The firms' new price targets of $160 and $180 imply meaningful upside from Generac's current share price. While such targets are best taken with a grain of salt, it's clear that there is the potential for plenty of upside ahead if Generac can get back on track, making it worthy of a small or more speculative investment for risk-tolerant investors.
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>>> Why Shares of Veru Fell 10.33% on Monday
Motley Fool
By Jim Halley
Nov 21, 2022
https://www.fool.com/investing/2022/11/21/why-shares-of-veru-fell-1033-on-monday/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Veru lost $22.2 million in the third quarter.
The stock already lost two-thirds of its value two weeks ago.
Veru is awaiting word from the FDA regarding the status of a drug.
Investors are concerned that approval for a COVID-19 therapy will be delayed or denied.
What happened
Veru (VERU), a biopharmaceutical company that looks for novel cancer therapies, particularly in breast cancer or prostate cancer, saw its shares drop 10.33% on Monday. The stock closed on Friday at $6, then opened on Monday at $5.89. It fell to a low of $5.33 before closing on Monday at $5.38. The stock is down more than 8% so far this year, and has a 52-week high of $24.55 and a 52-week low of $4.34.
So what
The company's stock already lost $10 a share two weeks ago when a Food and Drug Administration (FDA) advisory panel voted 8-5 against approving sabizabulin, Veru's COVID-19 oral therapy, via the Emergency Use Authorization route.
It's not the last word, but the FDA usually agrees with advisory panels' votes. In its discussions regarding the drug, the panel noted the phase 3 trial for sabizabulin had too small a sample size and recommended additional studies before the FDA approved the drug. The company is also expecting the European Medicines Agency's Emergency Task Force review of the drug. Monday's fall reflects continued concerns about the potential FDA decision.
Now what
Veru is struggling financially, so potential bad news regarding sabizabulin is compounded. In the third quarter, the company reported revenue of $9.6 million, down 46% year over year, while it reported a net loss of $22.2 million, or $0.28 in earnings per share (EPS), compared to a net loss in the third quarter of 2021 of $2.7 million, or a loss of $0.03 in EPS.
Veru does have some therapies in late-stage trials, including enobosarm to treat metastatic breast cancer and the combination of enobosarm and abemaciclib, a therapy developed by Eli Lilly (LLY -0.08%) to treat metastatic breast cancer. The FDA granted the combination therapy Fast Track designation.
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>>> Scotts Miracle-Gro still believes in cannabis' future. Here's how it plans to be a part of it.
The Etain marijuana dispensary in Manhattan. Riv Capital, backed with debt financing from a Scotts Miracle-Gro subsidiary, acquired Etain this year. New York state is expanding to adult recreational use from medical marijuana; sales could start by year's end.
By Carrie Ghose
Columbus Business First
Nov 11, 2022
https://www.bizjournals.com/columbus/news/2022/11/10/scotts-miracle-gro-cannabis-future-hathorne-riv.html?utm_source=sy&utm_medium=nsyp&utm_campaign=yh
Scotts Miracle-Gro Co. took a bruising from this year’s tumult in the U.S. marijuana industry, but the company is investing even more in a shot at eventual part ownership of a major consumer cannabis brand when federal prohibition ends.
The Marysville lawn and garden company has invested $175 million via convertible notes in Riv Capital Inc., and has an option to lend more. With a handful of former Scotts executives in top leadership, the Canadian firm is in the process of acquiring a cannabis company in New York, where recreational use is about to begin.
“We looked at the future of the industry,” Scotts CEO Jim Hagedorn told Columbus Business First. “Branded consumable products is where the money is going to be.”
Scotts (NYSE: SMG) supplies marijuana growers and indoor agriculture through its Hawthorne Gardening Co. subsidiary, which it built through $1.4 billion in acquisitions over the past eight years.
It’s the difference between owning a hops farm or Anheuser-Busch, said Chris Hagedorn, Scotts executive vice president and Hawthorne’s president.
Riv, based in Toronto, was formerly an investment arm of Canopy Growth Corp., separated in a divestiture last year.
The debt financing structure through a subsidiary keeps Scotts at legal arms’ length while cannabis remains federally outlawed, but the notes can convert to shares once the ban lifts – a maximum 49% stake depending on how much more it lends. Scotts also names four of seven board seats, including Chris Hagedorn.
“I think we’re the first ones to structure it the way we did,” Chris Hagedorn said in the joint interview with his father.
“We don’t control the business,” he said. “We have been able to seed some of the management team with former Scotts people.”
Mark Sims, also a Riv director, joined as CEO in March after almost 15 years at Scotts, most recently as senior vice president for strategy and mergers and acquisitions.
Other leaders that migrated from Scotts: COO Mike Totzke moved over in June after 17 years, most recently as a Hawthorne team lead, and is in charge of growing the New York business. Frank Tice, legal director, had been on the legal team advising Hawthorne. Amanda Rico, a Scotts vice president of human resources, joined Riv as HR chief last month.
Sims’ appointment marked a major strategy shift: Instead of a venture capital investor in Canadian cannabis growers and suppliers, Riv is getting directly into the business of growing and selling cannabis in the United States.
Riv achieved its goal of early entry into a high-population state where the market is about to grow quickly, Chris Hagedorn said. The company has closed the first phase of a $247 million cash-and-stock acquisition of Etain LLC and Etain IP LLC, which operate the full spectrum from cultivation to dispensaries in New York. It started in medical marijuana and will expand with recreational use.
Riv also is building a new 75,000-square-foot cultivation facility in Buffalo – with supplies and design consulting from Hawthorne.
Publicly traded tobacco companies have made similar moves, but most large consumer-facing companies have stayed out of the industry.
Optimism for Riv follows a rough year for Hawthorne. Oversupply in state marijuana markets, especially California, caused growers to pull back and Hawthorne sales to drop by half to $716 million. The division with an 11.5% operating margin last year had a full-year operating loss of $21 million in fiscal 2022.
Hawthorne cut hundreds of jobs, is closing distribution centers to consolidate with Scotts facilities and is shutting down product lines, including a lighting brand it acquired in December.
Accounting write-offs on several acquisitions led Scotts to its first annual net loss since 2008, and overall company sales dropped by $1 billion from a record 2021 to $3.9 billion.
A patchwork of state regulations and onerous tax structures have plagued the cannabis industry. Jim Hagedorn on investor calls has taken responsibility for misjudging how slowly a Democratic president and Congress would move on ending federal cannabis prohibition.
As part of cost-cutting this year, Scotts Miracle-Gro sold and leased back its Hawthorne subsidiary’s headquarters in Vancouver, Washington.
Industry advocates are hoping at least the Safe Banking Act can pass in a lame duck session, allowing state licensed operators to access banking and creating momentum for more profound reforms.
“I hope Sen. (Chuck) Schumer (the Senate majority leader) is good for his word when he says we’re close,” Chris Hagedorn said.
Scotts first invested in Riv in August 2021 through a subsidiary. Analysts have complained about the investment, Chris Hagedorn said.
“It’s not going to make money yet,” he said. “That business is on track. I’m extremely excited about the prospects of that business.”
And he is equally confident of the future for the original Hawthorne business, because of the future of the marijuana business.
“There’s no use case question here. Will Americans adopt cannabis usage? They did that a long time ago,” Chris Hagedorn said. “There is a healthy, profitable business to be had. Changes are necessary, and we are making them now.”
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Glaxo - >>> GSK plc (GSK), together with its subsidiaries, engages in the creation, discovery, development, manufacture, and marketing of pharmaceutical products, vaccines, over-the-counter medicines, and health-related consumer products in the United Kingdom, the United States, and internationally. It operates through four segments: Pharmaceuticals, Pharmaceuticals R&D, Vaccines, and Consumer Healthcare. The company offers pharmaceutical products comprising medicines in the therapeutic areas, such as respiratory, HIV, immuno-inflammation, oncology, anti-viral, central nervous system, cardiovascular and urogenital, metabolic, anti-bacterial, and dermatology. It also provides consumer healthcare products in wellness, oral health, nutrition, and skin health categories. The company offers its consumer healthcare products in the form of nasal sprays, tablets, syrups, lozenges, gum and trans-dermal patches, caplets, infant syrup drops, liquid filled suspension, wipes, gels, effervescents, toothpastes, toothbrushes, mouthwashes, denture adhesives and cleansers, topical creams and non-medicated patches, lip balm, gummies, and soft chews. It has collaboration agreements with 23andMe; Lyell Immunopharma, Inc.; Novartis; Sanofi SA; Surface Oncology; Progentec Diagnostics, Inc.; Alector, Inc.; and CureVac AG., as well as strategic partnership with IDEAYA Biosciences, Inc. and Vir Biotechnology, Inc. The company was formerly known as GlaxoSmithKline plc and changed its name to GSK plc in May 2022. GSK plc was founded in 1715 and is headquartered in Brentford, the United Kingdom.
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Citigroup - >>> Warren Buffett broke up with most of his beloved banks — why is he still swooning over this one?
MoneyWise
by Vishesh Raisinghani
June 18, 2022
https://finance.yahoo.com/news/warren-buffett-broke-most-beloved-130000046.html
The Oracle of Omaha has had a busy quarter.
According to his latest 13F filing, Warren Buffett has deployed roughly one-third of his cash into new investments during the first three months of the year.
As always, Buffett’s biggest swings are noteworthy. However, his decision to sell most bank stocks while adding Citigroup (C) to Berkshire Hathaway’s (BRK) portfolio is puzzling Wall Street.
Here’s why this contradiction has caught so much attention.
Buffett loves banks
Buffett is deeply familiar with banking and financial services. He believes the business is relatively straightforward and can be extremely lucrative if managed well.
“If you can just stay away from following the fads, and really making a lot of bad loans, banking has been a remarkably good business in this country,” he told Berkshire Hathaway investors in 2003.
What about the 2008 Global Financial Crisis? Buffett went on a shopping spree during that time, picking up stakes in JP Morgan (JPM) and Goldman Sachs (GS).
For several years, major banks have been the biggest holdings in the Berkshire portfolio. In 2009, he even said Wells Fargo (WFC) was his highest-conviction investment.
“If I had to put all my net worth in one stock, that would’ve been the stock,” he told Berkshire shareholders.
This year, Buffett has completely exited all these investments. Only a few banks remain in the portfolio.
That doesn’t mean the love affair with financial services is over.
In fact, Buffett added a new bank to his collection this year: Citigroup. During the first quarter of 2022, he added 55 million shares of Citigroup to the Berkshire portfolio.
The stake is now worth $2.5 billion, making it the 16th largest holding in the basket.
The bet seems to be predicated on a turnaround story.
Citigroup’s transformation
Citigroup has lagged behind its peers. Over the past five years, the stock is down over 28%.
Compare that to Bank of America’s 37% return over the same period. Even the SPDR S&P Bank ETF (KBE) is up 1.9%.
The company is now attempting a turnaround to catch up. Last year, Citigroup’s board appointed Jane Fraser as the new CEO — making her the first female leader of a major U.S. bank.
Fraser's strategy involves focusing on the more profitable segments of the business. Citigroup is selling or shutting down operations in Mexico, Australia, Philippines, South Korea and elsewhere.
Citi stock hasn’t fully reflected this new strategy.
An undervalued opportunity?
Citigroup stock currently trades at a price-to-earnings ratio of 5.6. Its price-to-book ratio is 0.52. That’s significantly lower than the industry average of 9.45 and 1.12 respectively.
Put simply, the stock is cheap.
If the new management team can streamline operations and boost profitability, the bank’s valuation could catch up with peers.
Meanwhile, a rising interest rate environment should provide another tailwind.
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>>> GE Stock A Buy? General Electric Reaffirms 2022 Financial Outlook Ahead Of 3-Way Split
Investor's Business Daily
by APARNA NARAYANAN
04/06/2022
https://www.investors.com/research/ge-stock-buy-or-sell/?src=A00220
General Electric (GE) is seeing end markets and cash flow improve as it transforms into an aviation pure play. But supply disruptions and rising inflation pose risks to aviation's recovery from the coronavirus pandemic. Is GE stock a buy right now?
On March 10, General Electric reaffirmed 2022 financial guidance along with longer-term profit and cash generation targets. GE also discussed its planned split into three separate, publicly traded companies.
On Jan. 25, GE delivered mixed earnings for its most recent quarter. Its key jet-engine aviation business continues to recover while managing impact from the Covid-19 omicron variant, CEO Larry Culp said.
GE Stock Technical Analysis
Shares failed a brief Nov. 9 breakout past 115.30 and there's no new buy point so far. GE stock remains below a falling 10-week moving average, which has undercut its longer-term, 40-week counterpart. Those are both technical negatives.
Shares broke out in November on news of GE's three-way split, but have tumbled since.
The relative strength line for GE stock has fallen sharply since last March, according to MarketSmith charts. It rallied for parts of 2020 and 2021 on hopes for GE's turnaround. A rising RS line means that a stock is outperforming the S&P 500 index. It is the blue line in the chart shown.
The industrial giant earns a dull IBD Composite Rating of 50 out of 99. The rating combines key technical and fundamental metrics in a single score.
General Electric owns an RS Rating of 35, meaning it has outperformed 35% of all stocks over the past year. The Accumulation/Distribution Rating is a D-, on a scale of A+ to a worst E. It's a sign of considerable selling of GE shares by big institutions over the past 13 weeks.
GE remains a popular stock with strong institutional support. As of December, 1,832 funds owned shares. GE stock shows zero quarters of rising fund ownership, according to the IBD Stock Checkup tool.
GE Earnings And Fundamental Analysis
On key earnings and sales metrics, GE stock earns an EPS Rating of 57 out of a best-possible 99, and an SMR Rating of D, on a scale of A+ (best) to E (worst). The EPS Rating compares a company's earnings per share growth vs. all other companies, and its SMR Rating reflects sales growth, profit margins and return on equity.
In recent years, GE shed a biotech unit, its light bulb business, and a majority stake in its oil field services business. It's merging its aircraft-leasing unit with AerCap (AER). Eventually, it's expected to exit jet leasing altogether.
On Jan. 25, GE posted earnings of 92 cents a share for the December quarter, beating views. Amid supply-chain issues, revenue fell 7% and missed. During the quarter, GE's aviation business grew sales 4% vs. a year earlier, while health care was down 4%, renewable energy was down 5% and power was down 10%. And the company recorded industrial free cash flow (FCF) of $3.7 billion for the quarter, and $5.8 billion for the full year.
But GE gave a weaker-than-expected 2022 EPS outlook, citing inflationary costs. It expects revenue and FCF to further improve.
The FCF measure is closely watched as a sign of the health of GE's operations and its ability to pay down debts. In 2020, GE generated $606 million in FCF, down 66%, but beating its own guidance. In fact, General Electric turned cash-positive a year ahead of schedule.
For 2022, analysts forecast GE earnings to vault 99% as sales rebound 4%. But General Electric is likely to surpass 2019 EPS of $5.20 only next year, FactSet says. In 2023, GE earnings are likely to rise a further 64% as sales grow 9%.
Out of 22 analysts on Wall Street, 15 rate GE stock a buy and seven have a hold, while no one has a sell, according to FactSet.
Big GE Split Caps Long Restructuring
In 2024, GE will emerge as an aviation-focused company after a three-way breakup. The American industrial icon plans to spin off its lower-growth health and energy businesses to focus on aviation.
The three-way GE split caps years of dwindling profits and a costly restructuring. It closes a key chapter in General Electric's 129-year-old history, with roots going back to Thomas Edison.
"Our contrarian bull case is that GE is not in 'deal purgatory,'" RBC Capital Markets analyst Deane Draywrote in a March 6 note. In fact, he thinks a faster separation timeline and additional divestitures could give shares a boost. The analyst has an outperform rating and 113 price target on GE stock.
Headwinds For GE Aviation
Aviation — GE's "crown jewel" — makes jet engines for plane makers including Boeing (BA) and Airbus (EADSY). GE Aviation also runs a lucrative aftermarket business for engine repair and maintenance.
In 2020, Boeing halted production of the 737 Max jet for a few months after two fatal flights, which weighed on Leap engine sales. On top of that, airlines parked planes and delayed or canceled orders due to the pandemic. Engine shop visits slowed while leasing customers sought short-term deferrals. As a result, GE Aviation slashed jobs by 25% and later warned of more cuts.
Many of those headwinds have lifted. Meanwhile, the market continues to shift from wide-bodies to longer-range, narrow-body aircraft, benefiting General Electric. A GE joint venture dominates the market for narrow-body jet engines.
GE sees the aviation recovery continuing in 2022. But it's monitoring newer Covid-19 variants.
During the pandemic, travel restrictions to halt the spread of Covid-19 negatively affected aircraft deliveries and orders.
Also amid the pandemic, some commercial aerospace suppliers struggled to deliver parts and equipment on time, due to shortages of semiconductor chips and plastics. Costs of aluminum and steel also rose. Those woes could persist in 2022, according to Fitch Ratings.
Growing Momentum For GE Stock
CEO Culp's top priority is improving General Electric's financial position, while strengthening GE's industrial core, as a maker of jet engines, gas turbines, wind turbines and hospital equipment.
In 2017, GE began a vast and costly restructuring. Poorly timed acquisitions and some execution missteps caused debt to balloon and GE earnings and cash to crumble.
But GE now touts recovery or stabilization in key business segments, including aviation and gas power.
Meanwhile, General Electric settled certain SEC investigations, while slashing billions in costs and debts. Those moves helped to remove legal and financial overhangs, de-risking GE stock.
As GE's financial condition improves, hopes for the dividend could follow. In December 2018, a cash-challenged General Electric slashed the quarterly dividend to a token penny a share. An earlier cut, announced in November 2017 along with a broad restructuring, had halved the dividend to 12 cents.
The cuts rattled investors, who prized GE stock for its long and reliable history of paying dividends. After a reverse stock split in August, GE stock now offers a 32-cent annual payout, yielding 0.4%.
Rivals To General Electric
Rivals to General Electric include Raytheon Technologies (RTX) and Siemens Energy.
Raytheon and Rolls-Royce of Britain are major jet-engine rivals. Siemens Energy competes with GE in power. It emerged in September after Siemens (SIEGY) spun off its low-margin gas turbine business. Japan's Mitsubishi Hitachi is another big power rival.
The diversified operations group ranks No. 31 out of 197 industry groups tracked by IBD. It includes 3M (MMM), Honeywell (HON) and Roper Technologies (ROP).
Is GE Stock A Buy Now?
General Electric continues to make progress in its long, ambitious turnaround. GE earnings, sales and cash flow are expected to further improve in 2022, as the airline industry and broader economy slowly recover from the pandemic.
Moreover, General Electric's poised for a huge transformation, breaking from its diversified past to focus on aviation. New Covid-19 variants could threaten the commercial aviation recovery.
Many analysts on Wall Street are bullish about GE's current leadership and improving fundamentals. But others remain on the sidelines. And GE belongs to an industry group that is acting relatively well.
From a technical perspective, GE stock sits below key support levels after a failed breakout attempt. It has no current buy point and the RS line shows significant lag.
Bottom line: GE stock is not a buy.
Over the long term, buying an index fund, such as SPDR S&P 500 (SPY), would have delivered safer, higher returns than GE stock. If you want to invest in a large-cap stock, IBD offers several strong ideas here.
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Scotts Miracle-Gro - >>> Why Investors Shouldn't Push the Panic Button on This Promising Growth Stock
Motley Fool
By David Jagielski
Mar 16, 2022
https://www.fool.com/investing/2022/03/16/why-investors-shouldnt-push-the-panic-button-on-th/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Scotts Miracle-Gro stock has taken a beating over the past year, losing half of its value.
A guidance that calls for declining sales has further discouraged investors from buying the stock.
However, for long-term investors, this could be a promising bargain buy right now.
Scotts Miracle-Gro is a safe way to invest in the cannabis industry.
In a fragile market like the one that exists now, it doesn't take much for shares of a company to crash on bad news. The marijuana sector is especially vulnerable given that there has not been any significant movement in legalizing cannabis in the U.S. over the past year.
One stock that has been struggling badly of late is Scotts Miracle-Gro ( SMG 3.58% ). Although its business involves more than just cannabis, that is a big part of its growth. But unfortunately, that's been an area of weakness since the company provided some disappointing guidance. Despite the troubling news, however, investors shouldn't rush to sell the stock.
Revenue from its hydroponics business to decline up to 25%
Earlier this month, Scotts' Chief Financial Officer Cory Miller said that its hydroponics segment, Hawthorne Gardening, which helps provide equipment to more efficiently grow crops (including cannabis), could see its sales decline between 15% and 25% this year. This is because there is an oversupply of cannabis in the market, which is hurting demand. The company says the business unit has been struggling with it for "several months."
When the company reported its quarterly earnings in February, sales totaling $566 million were down 24% for the period ending Jan. 1. While both its traditional gardening segment and Hawthorne were down double digits, the latter's 38% decline in sales was more significant (the other segment was down 16%).
The beaten-down stock has been struggling for a while, and now it is half the value of what it was worth just a year ago.
Why investors shouldn't lose hope
It's been discouraging to see this once-hot growth stock plummet in the past year. But a key reason I'm not selling the stock, and why other investors shouldn't get discouraged either, is that the cannabis industry still has a long way to go. While there is an oversupply problem today, that can and will likely change as the industry evolves and gets bigger.
Two of the top markets that recently legalized marijuana for recreational use are New Jersey and New York. However, neither are open for business just yet. The former could be up and running in weeks, but the latter may not be ready until at least the fall, if not later.
Currently, 37 states permit medical marijuana, and 18 have passed legislation allowing recreational use. As more states legalize cannabis, growth opportunities will open up, attracting new producers to the industry. According to Research and Markets, in North America, the legal pot market will be worth more than $38 billion by 2028, expanding at a compounded annual growth rate of 16.6% until then.
Many reasons to buy Scotts today
Despite the bearishness, Scotts could make for an attractive growth stock to invest in. Although sales have been going in the wrong direction of late, there's little doubt that the business will recover. Scotts recently added to Hawthorne's portfolio of products with the acquisition of True Liberty Bags, which provides liners and storage solutions, and lighting company Luxx Lighting. In the big picture, the company is positioning itself for a larger role in the industry's growth, which makes Scotts a promising growth stock to hold.
In addition to the growth prospects, the company also pays an attractive dividend yield of 2.3%, which is about a full point better than the S&P 500 average of 1.3%. Plus, with Scotts trading at its 52-week lows for the year and at a forward price-to-earnings multiple of less than 14 (rival hydroponics company GrowGeneration trades at more than 109 times future profits), investors are getting the stock at a discount right now.
Buying shares of Scotts and holding on for the long haul could be a move you thank yourself for in the future.
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Scotts Miracle-Gro - >>> Is the Grass Looking Greener for Scotts Miracle-Gro?
Motley Fool
By Michael Byrne
Mar 23, 2022
https://www.fool.com/investing/2022/03/23/is-the-grass-looking-greener-for-scotts-miracle-gr/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Shares of Scotts have sold off 50% as it has been grouped with work-from-home stocks.
But the company is well-positioned to ride out current economic turbulence.
It has strong brands, pricing power, a decent yield, and management that is aligned with shareholders.
Spring is in the air. It could be time for a fresh look at Scotts Miracle-Gro.
Spring is in the air, conjuring up images of flowers blooming, birds chirping, Opening Day first pitches -- and maybe even fresh, green lawns. Investors in the company behind many of those lush lawns, Scotts Miracle-Gro ( SMG 3.58% ), are looking forward to a fresh spring start as the stock of the leader in the garden and lawn-care industry is down nearly 50% from its 52-week high.
The decline is largely a result of the market punishing the stock for being a "COVID beneficiary." Additionally, excitement for Hawthorne, Scotts' cannabis supplies business, has dried up as marijuana stocks have struggled over the past year.
But the sell-off seems overdone, and perception that Scotts is simply benefiting from COVID-era trends seems shortsighted. In fact, the company looks well-positioned to deal with the current economic environment since it is a durable industry leader with strong brands and pricing power.
No one is going to stop taking care of their lawn
It's been almost impossible to tune out news of inflation over the past several months as it hit a blistering 7.9% in the U.S. in February. This is troubling news for companies in many sectors of the economy that rely on discretionary purchases.
What I like about Scotts in this situation is that, for the most part, homeowners are going to keep taking care of their lawns regardless of what is going on in the broader economy. For better or worse, having a healthy green lawn has become something of a status symbol in the suburban United States, and most homeowners are going to continue to spend what's required to have an attractive lawn.
Some people might cut out a night on the town or a fancy dinner from their monthly expenses. But it's unlikely that they will forgo maintaining their property and risk having to live with a shabby lawn for the whole spring and summer (not to mention the comments from neighbors).
A nice, sprawling green lawn also gives a property curb appeal. And with primary residences serving as the largest financial asset many Americans have, they will continue do what they can to maintain or boost the value of their homes.
For these qualitative reasons, I view Scotts as a stock that can weather a potential downturn in the economy and successfully navigate through inflation.
Even better, we have evidence that the company can pass price increases on to its customers. Scotts has been able to raise its prices by 2% to 3% almost every year for the last 10 years. On its latest conference call, CEO Jim Hagedorn stated that the company will raise prices in the second half of the year, which would be the third increase over the past year.
This is the sign of a business that has pricing power and can keep up with or beat inflation over the long run. Scotts can exercise this power thanks to the aforementioned importance of lawn care to its customer base, as well as its brand equity. Scotts' core portfolio of brands includes household names like Miracle-Gro, Tomcat, and Ortho.
Is Scotts Miracle-Gro a Buy?
Shares are down 50% as the market has lumped Scotts in with COVID beneficiaries and work-from-home stocks. The company did benefit from these trends (it gained about 20 million customers during this time frame). But it also expects about 85% of these customers to stay with the company, meaning that even though some of these customers will leave, the company still has many more than it did before. Looking ahead, the inelastic demand for Scotts' products, its strong brands, and its pricing power should help the company to weather inflation.
In addition to all that, Scotts also offers investors the added bonus of a dividend payout that currently yields just over 2%. Lastly, Hagedorn has been at the helm of the company since 2001, and he and his family own about one quarter of the shares outstanding, so management has a long-term outlook that is aligned with shareholders. For these reasons, it looks like it is ready to return to greener pastures.
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>>> Stericycle, Inc. (NASDAQ:SRCL)
https://finance.yahoo.com/news/10-recycling-stocks-buy-now-182403754.html
Number of Hedge Fund Holders: 16
Stericycle, Inc. (NASDAQ:SRCL) provides regulated and compliance solutions. The firm primarily serves the healthcare industry in the United States and Europe. On March 23, RBC Capital analyst Sean Dodge kept an Outperform rating on the stock with a price target of $82, naming the stock as the "New Top Idea for 2022" in a bullish investor note that highlighted the "sustained organic revenue growth and margin expansion" for the firm that were offsetting near-term risks.
Stericycle, Inc. (NASDAQ:SRCL) shares have pulled back in the past few months and now seem attractively valued, per market experts like Dodge, given the capital allocation initiatives that the waste management firm has undertaken in relation to debt reduction and business or asset sales.
At the end of the fourth quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $472 million in Stericycle, Inc. (NASDAQ:SRCL), compared to 17 in the previous quarter worth $516 million.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Ariel Investments is a leading shareholder in Stericycle, Inc. (NASDAQ:SRCL) with 4.2 million shares worth more than $253 million.
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>>> EPAM Stock Jumps On Hopes For Ukraine-Russia Cease-Fire
Investor's Business Daily
REINHARDT KRAUSE
03/29/2022
https://www.investors.com/news/technology/epam-stock-jumps-on-hopes-for-ukraine-russia-cease-fire/?src=A00220
Epam Systems (EPAM) continues to trade on news related to Russia's invasion of Ukraine. EPAM stock jumped on Tuesday with cease-fire talks between Russia and Ukraine underway in Turkey.
Shares popped 11.6% to close at 307.05 on the stock market today. U.S. stock exchanges also rose on hopes for a Russia-Ukraine cease-fire.
Despite its gain, Epam stock is still down 52% in 2022. EPAM stock may have bottomed at 168.59 in intraday trading on March 8.
The Newtown, Pa.-based custom software maker hires most of its developers in Eastern Europe, with most of its offshore centers in Belarus, Ukraine, Russia and Hungary.
EPAM Stock: Exposure To Ukraine, Belarus
As of the fourth quarter in 2021, 41% of Epam's employees delivered services from Ukraine and Belarus, down about 10% from a year earlier, according to a Susquehanna Financial report. Further, the company has stepped up hiring in other regions.
Epam provides custom software development and platform engineering services. It specializes in digital services, with customers adopting new technologies such as cloud computing or big data analytics.
Meanwhile, Arkadiy Dobkin has been Epam's chief executive since late 2002. Dobkin began his career in Belarus and Russia, where he worked at several software companies.
Dobkin co-founded Epam in 1993. Originally the company was called Effective Programming for America.
If you're new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns for issues such as EPAM stock is one key to the investment guidelines.
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Epam - >>> The 8 worst-performing S&P 500 stocks with the highest ratings are expected to rebound by more than 50% over the next year
MarketWatch
March 15, 2022
By Philip van Doorn
https://www.marketwatch.com/story/the-8-worst-performing-s-p-500-stocks-with-the-highest-ratings-are-expected-to-rebound-by-more-than-50-over-the-next-year-11647355397?siteid=yhoof2
Favored stocks for bounce-backs include EPAM, PayPal, Meta and Netflix
Investors don’t need to be told that stocks have been volatile. There’s a market of extremes as Russia’s war in Ukraine continues and investors wait to see what the Federal Open Market Committee does with interest-rate policy March 16.
Below is a list of eight stocks in the S&P 500 SPX, 2.24% that have dropped at least 50% from their 52-week highs, but are favored by analysts for gains of as much as 102% over the next 12 months.
Rebounds can be rapid
From its all-time intraday high on Jan. 4, the S&P 500 was down 13.4% through March 14. That broad decline masks the intensity of daily price movements.
On March 14 — when the S&P 500 declined 0.7%, 153 of its component stocks moved at least 2% up or down, with 82 moving at least 3%, 45 at least 4% and 24 rising or falling by at least 5%.
Discount prices
Sometimes investors will focus on quality for a long-term strategy, emphasizing companies’ growth prospects, operational and profit-margin improvements, or maybe dividend income. But investors and traders may also try to scoop up stocks at discount prices after significant declines, hoping to ride the rebound wave.
At a time of high volatility, some declines that have been driven by companies’ own outlooks for revenue and earnings may have been overdone. Hindsight will be 20/20.
In the meantime, a screen of price action for the S&P 500 components through March 14 shows that 16 stock were down at least 50% from their 52-week intraday highs. Among the 16 stocks, eight have majority “buy” or equivalent ratings among analysts polled by FactSet.
Here they are, sorted by implied upside over the next year, based on consensus price targets:
Company Ticker Decline from 52-week intraday high Date of 52-week intraday high Share “buy” ratings Closing price – March 14
Cons. price target Implied 12-month upside potential
EPAM Systems Inc. EPAM, +25.19% -70% 11/05/2021 65%
$220.00 $444.93 102%
PayPal Holdings Inc. PYPL, +7.43% -69% 07/26/2021 76% $96.87 $182.20 88%
Etsy Inc. ETSY -62% 11/26/2021 67% $118.32 $211.28 79%
Match Group Inc. MTCH, +5.47% -53% 10/21/2021 86% $85.06 $149.85 76%
Meta Platforms Inc. Class A FB -51% 09/01/2021 66% $186.63 $314.80 69%
Las Vegas Sands Corp. LVS, +11.88% -52% 03/16/2021 56% $32.09 $52.04 62%
Penn National Gaming Inc. PENN, +6.01% -72% 03/15/2021 62% $40.30 $63.95 59%
Netflix Inc. NFLX, +4.01% -53% 11/17/2021 52% $331.01 $509.59 54%
Source: FactSet
Click on the tickers for more about each company, including coverage of the recent comments from management teams that did so much to push down shares of PayPal Holdings Inc. PYPL, +7.43%, Facebook holding company Meta Platforms Inc. FB, +6.04% and Netflix Inc. NFLX, +4.01%.
As if to emphasize how volatile this market can be, shares of EPAM Systems Inc. rose 10% on March 14. The software development services company has 14,000 employees in Ukraine.
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>>> EPAM stock bounces after bullish Stifel analyst suggests record selloff may have created an opportunity
MarketWatch
March 1, 2022
By Tomi Kilgore
https://www.marketwatch.com/story/epam-stock-bounces-after-bullish-stifel-analyst-suggests-record-selloff-may-have-created-an-opportunity-2022-03-01?siteid=bigcharts&dist=bigcharts
Shares of EPAM Systems Inc. EPAM, +6.03% bounced 8.5% in afternoon trading Tuesday, after Stifel Nicolaus analyst David Grossman said he was still bullish on the provider of digital transformation services company, as the record selloff in the wake of Russia's invasion of Ukraine may have created a buying opportunity. The stock had plunged 45.7% on Monday, and has now plummeted 46.1% in the four days since the full invasion started last Thursday (418.23), while the S&P 500 SPX, -1.30% has gained 2.0% over the past four sessions. "While we acknowledge ongoing uncertainty/risk, EPAM is a bellwether at the high-end of the technology stack, the heart of digital transformation, and we have high confidence they can pivot and resume industry leading growth once things stabilize," Grossman wrote in a note to clients. He reiterated the buy rating he's had on the stock for at least the past three years. He slashed his stock price target to $385 from $630, but his new target still implies 70.8% upside from current levels.
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>>> EPAM ends services to Russian customers, pledges $100M in Ukrainian support
By Ryan Mulligan
Philadelphia Business Journal
Mar 4, 2022
https://www.bizjournals.com/philadelphia/news/2022/03/04/epam-russia-customers-ukraine.html?ana=yahoo
Bucks County software maker EPAM Systems Inc. said Friday it is cutting off services to customers located in Russia.
The Newtown-based company has a substantial presence in Eastern Europe with some 14,000 employees in Ukraine and almost 9,000 in Russia. EPAM was founded in Belarus in 1993. The country, a close Russian ally, has drawn criticism for its support of Russia during the war.
EPAM (NYSE: EPAM) on Friday announced its "full support of Ukraine," pledging an incremental $100 million humanitarian commitment to support employees and their families in Ukraine.
"What is happening in Ukraine is deeply personal for us," said EPAM founder and CEO Arkadiy Dobkin. He added that the software company is "doing everything possible to support our Ukrainian colleagues and friends."
For Russian customers affected by the move to discontinue services, EPAM said it would provide transition support.
"EPAM does not do work for the government in Russia and is and will continue to be in full compliance with all sanctions," the company said in a statement.
The company also said it is actively evaluating its other operations in the region. EPAM reiterated on Friday it is "executing business continuity plans and accelerating hiring across multiple locations in Central and Eastern Europe, Latin America, and India." The company continues to operate in over 40 countries.
EPAM reported 2021 revenue of $3.8 billion. Some $168 million of that revenue came from Russia, Belarus, Kazakhstan, Ukraine and Georgia, filings show.
Many companies, universities and law firms are severing ties with their customers and offices in Russia as sanctions continue to heighten and impact the global economy. EPAM joins a growing list of tech companies to cut ties with Russia this week, including Dell, Google and Microsoft. The White House announced on Feb. 24 that it would be cutting off direct technological exports to Russia and on Wednesday, it said the same restrictions would extend to Belarus.
On Monday, EPAM's stock plummeted about 46% after it withdrew its financial outlook due to "heightened uncertainties" after Russia's invasion of Ukraine. The stock began to rebound Tuesday, but is seeing a drop on Friday. As of 12:30 time, shares were down 5% to $202.30. The stock is down 55% over the last month.
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>>> Ecolab Expects Strong 4Q 2021 Sales Growth but Lower Than Expected EPS Growth Due to COVID & Supply Chain Disruptions; Expects Low-Teens Adjusted EPS Growth in Full-Year 2022
Business Wire
January 20, 2022
https://finance.yahoo.com/news/ecolab-expects-strong-4q-2021-213000274.html
ST. PAUL, Minn., January 20, 2022--(BUSINESS WIRE)--Ecolab said that it expects reported sales to increase 10% versus last year and acquisition adjusted fixed currency sales growth to accelerate to 9% in its fourth quarter 2021, led by double-digit increases in the Institutional & Specialty and Other segments, with further strong gains in the Industrial segment. However, fourth quarter adjusted diluted earnings per share growth (excluding Purolite impact) is expected to be below the previously announced double-digit growth outlook as temporary COVID related effects on broad business activity impacted the speed of the market recovery in the fourth quarter. Ecolab also absorbed significant short-term cost increases to assure seamless customer supply in a very tight environment that impacted margins in the short-term.
These incremental supply headwinds, alone estimated to be an unfavorable $0.10 per share, are expected to result in fourth quarter reported earnings per share from continuing operations in a $1.03 to $1.05 range and adjusted diluted earnings per share from continuing operations (excluding Purolite impact) in a $1.26 to $1.28 range, showing modest year over year growth. For the full year 2021, this would yield 16% to 17% adjusted diluted earnings per share growth, including an estimated $1.00 per share of substantial delivered product cost inflation and other supply chain impacts. Assuming the rate of cost inflation and COVID impacts ease over the next couple of quarters, Ecolab expects continued strong sales and pricing momentum in 2022 and looks for full-year 2022 adjusted diluted earnings per share growth to rise in the low-teens.
Fourth quarter and full year 2021 results remain subject to our normal year-end accounting and financial reporting procedures. Ecolab expects to report fourth quarter 2021 results February 15, 2022.
Christophe Beck, Ecolab’s president and chief executive officer, said, "In this very challenging environment, we remain encouraged by the exceptional work of our teams, which led to the strong sales results, new business wins and accelerating pricing nearing 4% as we exited the quarter, all of which improved further from the third quarter and underscore the success of our long-term value proposition. The raw material supply and customer logistics issues remain significant, which is why we have focused our efforts on protecting our current customers and on serving earlier business wins, with extraordinary actions that came at a substantial short-term cost. This was the outcome of a strategic decision made in 2020 to protect our current customers while investing further in accelerating share gains to emerge even stronger as market disruptions ease.
"We enter 2022 not with the environment we expected, but with the underlying momentum we wanted to have. With a continued, but uneven, global economic recovery, we expect further strong sales trends, robust new business wins, new innovation and increased pricing to capture the incremental value we create for our customers and to compensate for the much higher supply costs we expect in 2022. At the same time, we will continue to leverage digital automation to drive performance in ways that improve both customer experience and cost efficiency. While we expect the challenges that affected us and the rest of the world in the fourth quarter to continue into the first quarter of 2022, assuming the rate of cost inflation and COVID impacts ease over the next couple of quarters, we believe our continued actions should help us deliver improved results as the year goes on and deliver strong full year 2022 sales growth with adjusted diluted earnings per share growth reaching low-teens levels.
"With our unique value proposition to help solve the world’s people and planet health challenges while improving business health, we remain confident in our longer-term outlook and we expect to continue to leverage our growth opportunities to drive superior results for our customers and shareholders."
About Ecolab
A trusted partner at nearly three million commercial customer locations, Ecolab (ECL) is the global leader in water, hygiene and infection prevention solutions and services. With annual sales of $12 billion and more than 44,000 associates, Ecolab delivers comprehensive solutions, data-driven insights and personalized service to advance food safety, maintain clean and safe environments, optimize water and energy use, and improve operational efficiencies and sustainability for customers in the food, healthcare, hospitality and industrial markets in more than 170 countries around the world. www.ecolab.com
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>>> EPAM Shares Continue to Fall on Ukraine Crisis & Russia Exit
Zacks Equity Research
March 7, 2022
https://finance.yahoo.com/news/epam-shares-continue-fall-ukraine-155103265.html
EPAM Systems’ EPAM shares closed in the red on Mar 4 due to escalating Russia-Ukraine crisis and the company’s decision to shut down operations in Russia. It is worth mentioning that after months of growing tensions between the two countries, Russia invaded Ukraine on Feb 21.
Since then, the stock has plunged 55.2% on growing concerns over business disruptions amid the ongoing war between Russia and Ukraine.
EPAM recently announced that it will discontinue its services in Russia in support of Ukraine. The company’s move is consistent with the US government’s Mar 24 announcement of cutting off direct technological export to Russia as part of a series of economic and financial sanctions imposed on the country for initiating military attack on Ukraine.
EPAM has significant exposure in the region with majority of its delivery centers located in Central and Eastern Europe (“CEE”). In fact, the company’s largest delivery centers are located in Belarus, Russia and Ukraine. It has approximately 9,000 and 14,000 employees in Russia and Ukraine, respectively.
Per EPAM’s management, the company will offer a $100 million humanitarian aid to the Ukrainian employees and their families. The company stated that it is in full support of all the sanctions. It also declared that it is evaluating other operations in the region.
EPAM stated that it will offer transition support to its existing Russian customer base. In the latest quarterly report, revenues from CEE were $55 million (accounting for 5% of total revenues).
In fiscal 2021, EPAM generated $168 million of revenues from CEE. Escalation in the ongoing conflict is likely to hurt the company’s revenues and profitability.
Besides, EPAM’s market share and revenues depend on client relationships and the number of contracts it secures. This, along with the limited scope for product differentiation, makes renegotiation of large contracts extremely important. As a result, competition from companies like Accenture and Infosys is a constant pressure.
Also, tough competition from regions like Europe might increase pricing pressure for EPAM.
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>>> GrowGeneration Corp. (GRWG), through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. It engages in the marketing and distribution of horticultural, organics, and lighting and hydroponics products, including lighting fixtures, nutrients, seeds and growing media, systems, trays, fans, filters, humidifiers and dehumidifiers, timers, instruments, water pumps, irrigation supplies, and hand tools. The company also operates GrowGen.Pro, an online e-commerce store. The company serves commercial and urban cultivators growing specialty crops, including organics, greens, and plant-based medicines. As of January 24, 2022, it operated a chain of 63 stores, which includes 24 in California, 8 in Colorado, 7 in Michigan, 5 in Maine, 6 in Oklahoma, 4 in Oregon, 3 in Washington, 2 in Nevada, 1 in Arizona, 1 in Rhode Island, 1 in Florida, and 1 in Massachusetts, as well as an online e-commerce store. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.
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>>> Behold, the 7 ‘most hated’ assets for 2022
MarketWatch
Jan. 19, 2022
By Brett Arends
https://www.marketwatch.com/story/behold-the-7-most-hated-assets-for-2022-11642608504?siteid=bigcharts&dist=bigcharts
Look at what the big-money geniuses are doing — and do the exact opposite
Pariah Capital is excited to announce its investment portfolio for 2022.
Pariah will be investing solely in the assets that are most hated and shunned by the $1 trillion geniuses running the world’s biggest pension funds and institutional endowments.
Pariah Capital’s management figures that they don’t need to spend a ton of money hiring MBAs and Chartered Financial Analysts, high-paid consultants and the like. Instead they let everyone else do that. Then they look at what these geniuses are doing, and just do the exact opposite.
It works better than you might think.
This year Pariah will be investing its money in bonds, utility stocks, telecoms stocks, consumer staples stocks, and in the stock market indexes of London, Tokyo and Emerging Markets.
That means an equally-weighted portfolio of 7 ETFs:
iShares Core U.S. Aggregate Bond AGG, +0.33%,
Fidelity’s MSCI Utilities FUTY, +0.58%,
Communication Services FCOM, -0.04%, and
Consumer Staples FSTA, +0.42% ETFs, and
Franklin FTSE U.K. FLGB, +0.75% and
Japan FLJP, -1.81% funds, and
Vanguard Emerging Markets VWO, -0.89%.
Pariah Capital is reasonably hopeful that its portfolio will do better than most competitors—especially before fees!
Pariah Capital is also hopeful it will do better than a traditional “balanced” portfolio consisting of 60% S&P 500 SPY, -0.49% and 40% bonds AGG, +0.33%.
Incidentally, this is Pariah’s U.S. portfolio, to be compared with a U.S. index. Pariah also offers a global portfolio, to compete with a global balanced index fund. More on that below.
Pariah, in case this isn’t obvious, is just a tongue-in-cheek exercise and is not to be taken (too) seriously. The point is to monitor how well or badly the most hated assets on Wall Street end up doing every year.
Last year, for example, a similar collection of 7 most hated assets ended up beating Wall Street by a country mile. And that wasn’t the first time.
A year ago, energy stocks were the most hated asset of all. The sector ended up rocketing more than 50%, beating every other. Today, incidentally, the money managers who were shunning energy stocks are now investing in them.
Pariah announces its 2022 portfolio following the publication of the latest survey of global money managers by Bank of America Securities.
The bank surveyed over 300 chief investment officers handling funds with just over $1 trillion in total assets.
Putting out this survey is the second best thing Bank of America does, and almost as good as the free lollipops in the branches.
Institutional money managers tell BofA they are bearish of the 7 assets named above. They are especially bearish of bonds.
They also report, interestingly, that right now they are only slightly overallocated to technology stocks. Make of that what you will.
Meanwhile they announce that they are betting big on banking stocks, industrials, materials and energy stocks, and stocks based in Eurozone countries such as France, Germany and Italy.
They are holding plenty of cash.
And, notably, they aren’t just bullish on commodities such as oil, copper and gold, but the most bullish on record. Commodities, reports BofA, “hit their highest ever net allocation” this month.
So a DIY investor who wanted to do the opposite of Pariah Capital, and bet the same way as the big money crowd, could approximately follow their 7 biggest picks with, for example, these ETFs: SPDR euro STOXX 50 FEZ, -0.36%, SPDR S&P Bank KBE, -2.11% and Energy Select XLE, +1.09%, Fidelity MSCI Industrials FIDU, -1.13% and Materials FMAT, +0.15% ETFs, Goldman Sachs Access Treasury 0-1 ETF GBIL, , and iShares Bloomberg Roll Select Commodity ETF CMDY, -0.13%.
It’s not just ironic that the most fashionable investments on Wall Street often end up doing badly, and the least fashionable end up doing well. It’s somewhat logical. The big money managers move the markets, and they tend to move as a herd. So by the time they’ve all bet heavily on one asset or another, they’ve already driven up the price, and probably too far. Meanwhile once they’ve despaired of something else and dumped it, they’ve driven down the price, and probably too far as well.
For those who want to follow the full global index, and not just the U.S. one, Pariah Capital offers a global portfolio. That substitutes Vanguard Total World Bond BNDW, +0.23%, iShares’ Global Utilities JXI, +0.62%, Global Communication Services IXP, +0.32%, and Global Consumer Staples KXI, +0.39% ETFs for AGG, FUTY, FCOM and FSTA. The fees are higher but you get more diversification.
The global portfolio should be compared with a global index portfolio, consisting of 60% Vanguard Total World Stock VT, -0.75% or equivalent, and 40% Vanguard Total World Bond BNDW, +0.23%.
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Paypal, GPN, IPAY - >>> Investors Lose $201 Billion On These 7 Giant Losers This Year
Investor's Business Daily
MATT KRANTZ08:00 AM ET
12/29/2021
https://www.investors.com/etfs-and-funds/sectors/sp500-investors-lost-201-billion-this-year-on-these-giant-losers/?src=A00220
Losing money in the S&P 500 is never fun. But it stings all the more when everyone else is making tons on their stocks.
Seven S&P 500 stocks, including PayPal Holdings (PYPL), Walt Disney (DIS) and AT&T (T), cost investors more than $200 billion in lost market value this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. Each of them shed $18 billion, or more, in value individually this year.
Losing money stings all the more in 2021. Thanks to a powerful 27.5% jump by the S&P 500 this year alone, companies in the index added more than $9 trillion to investors' portfolios. But not if you held these unlucky seven stocks.
SPDR Sector ETFs: intraday % Chg.
Real EstateXLRE0.61%
Health CareXLV0.61%
UtilitiesXLU0.54%
Consumer StaplesXLP0.46%
MaterialsXLB0.4%
Consumer DiscretionaryXLY0.2%
IndustrialsXLI0.16%
Information TechnologyXLK0.09%
FinancialsXLF-0.13%
Communication ServicesXLC-0.49%
EnergyXLE-0.64%
Losing Money In The S&P 500 Was Hard To Do
Investors who lost money in S&P 500 stocks won't have many shoulders to cry on. It was actually really tough to lose money in 2021.
Just 73 S&P 500 stocks, or roughly 15%, shed market value in 2021. And big losses were even harder to find. Only 13 stocks in the S&P 500 suffered market value drops of more than $10 billion.
On a straight percentage loss basis, losing money took some bad luck, too. Only 22 S&P 500 companies, accounting for just 4% of the index, dropped by 15% of more in 2022.
S&P 500 Tech: Not All Sunshine And Unicorns
It's been a great year for S&P 500 tech stocks, mostly. The Technology Select Sector SPDR (XLK) is up 35.2% this year. But the sector has had its share of misfires, too.
Online payments company PayPal Holdings is the No. 1 loser of market value in 2021 in the S&P 500 this year. And it's also part of the S&P 500 technology sector. With its shares sinking nearly 19% in 2021 to 190.10, that erased nearly $48 billion in market value.
PayPal's sinking market value isn't due to any weakness in fundamental growth. The company is on pace to earn $4.61 a share in 2021, a nearly 19% jump from 2020. Analysts, too, seem to be caught off-guard by the shares' weakness. They rate PayPal with an "outperform" rating with a 12-month price target of 274.81. If they're right, the stock is undervalued by nearly 30%.
But PayPal isn't the only disappointing tech stock this year.
Global Payments (GPN), which provides payment processing know-how to other companies, has seen its shares drop by nearly 38% this year to 135.15. That crashed wiped more than $23 billion off its market value in 2021. Analysts, again, think it's underrated. They're calling for the stock to trade at 191.43 a share in 12 months. That's roughly 40% upside.
Disappointment In The Happiest Place On Earth
Disney, too, hasn't worked out the way many S&P 500 investors might have planned.
It's down more than 14% this year to 155.20, erasing more than $45 billion in market value. It's also the worst stock in the Dow Jones Industrial Average this year. And all this is a bit of a surprise as hopes were high for the company's profit upon the reopening of theme parks in 2021. Profit for the fiscal year ended in September 2022 is seen jumping more than 75%.
At least Disney, though, has company among stocks underperforming in 2021 in the communications sector. Four of the seven stocks with the largest drops in market value this year all hail from the sector. AT&T, too, has languished again this year. It's down nearly 14% this year, wiping out not only its dividend, but $25 billion in market value.
But some of these stocks could redeem themselves in 2022. Disney, for one, is one of the S&P 500 stocks known to be a top performer during the annual Santa Claus Rally. Should you buy Disney stock now? Just be glad you didn't buy it this year.
Biggest S&P 500 Duds In 2021
Lost the most in market value this year
Company Symbol Market value change (2021), in $ billions YTD stock % ch. Sector
PayPal Holdings (PYPL) -$47.9 -18.8% Information Technology
Walt Disney (DIS) -45.9 -14.3 Communication Services
AT&T (T) -25.8 -13.7 Communication Services
Global Payments (GPN) -23.7 -37.3 Information Technology
Fidelity National Information Services (FIS) -20.0 -22.7 Information Technology
Verizon Communications (VZ) -19.3 -10.3 Communication Services
Activision Blizzard (ATVI) -18.8 -28.2 Communication Services
Source: S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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Calavo Growers - >>> 3 Promising Plant-Based Stocks For a Growing Portfolio
Investor Place
by Tezcan Gecgil
November 12, 2021
https://finance.yahoo.com/news/3-promising-plant-based-stocks-191919715.html
Santa Paola, California-based Calavo Growers is one of the largest producers of avocados in North America. The company sells avocados to supermarket chains, wholesalers, foodservice providers, as well as other distributors.
Calavo Growers announced Q3 results in early September. Revenue increased 5% year-over-year from a year ago to $285 million. Adjusted net loss came in at $3 million, or 17 cents per diluted share, compared to an adjusted net income of $12.9 million, or 73 cents per share, in the prior-year quarter. Cash and equivalents ended the period at $1.3 million.
On the results, CEO Steven Hollister said, “Our results for the third quarter of this year were adversely impacted by inflationary pressures on labor, raw materials and freight, all of which accelerated as the third quarter progressed.”
Global demand for avocados is forecast to grow at a compound annual growth rate of 5.6% between 2020 to 2026. As it takes longer than 10 years to grow a new avocado tree, Calavo is positioned for long-term growth. In addition, the grower has extended its products to include fresh-cut fruits and veggies, addressing the growing demand for healthy food.
This is expected to mark the tenth consecutive year of dividend increases. CVGW stock currently offers a dividend yield of 2.7%.
Despite its strong fundamentals, shares have declined by 50% since its high in early March. The stock is near $42, down 39% so far this year. The pullback over the past six months offers an opportunity to buy CVGW stock at a bargain price. It is trading at 33x forward earnings and 0.75x trailing sales.
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>>> C3.ai Could Surge Given Huge Short Interest and Improving Outlook
Investor Place
by Ian Bezek
November 11, 2021
https://finance.yahoo.com/news/c3-ai-could-surge-given-163602521.html
C3.ai (NYSE:AI) has had a seriously underwhelming 2021; AI stock has dropped more than 60% year-to-date. That said, most of the damage was done in the spring, when shares tumbled from $120 to $50. Since then, AI stock has moved in a trading range as investors wait for new developments from the firm to reset the narrative.
Over the past couple of weeks, however, AI stock has started to show some signs of life; shares have advanced from $44 to $52. We’ll get to why sentiment is turning in a moment. However, first, it’s worth understanding the company’s founder and CEO, Tom Siebel, and how he has positioned C3.ai for success.
A Bet on the Jockey
There’s an investing idea called betting on the jockey. In a newly-emerging industry, it can be hard to handicap which of the companies has the best technology. Everything is evolving so quickly in artificial intelligence (AI) right now. So instead of making a thesis based on the best software today, instead you pick the best management team. Don’t bet the horse, bet on the person riding the horse.
Tom Siebel is the perfect person to be leading C3.ai right now. Siebel graduated from the University of Illinois with his graduate work in databases, and immediately went to work for Oracle (NASDAQ:ORCL) in the early 1980s. At the time, no one had any idea Oracle would end up being the behemoth that it later became; Siebel was among Oracle’s first two dozen employees.
Siebel worked at Oracle for a decade and helped make them one of the global leaders in databases. However, Siebel wanted to launch a database program focused on sales. Oracle wasn’t sold on the idea. So Siebel set out on his own, founding Siebel Systems. Siebel was the first big player in what is now known as customer relations management (CRM) software. This was one of the fastest-growing application software companies of all time; Siebel founded it in 1993 and by 2000 it was doing $2 billion a year in revenues.
Ultimately, Oracle realized the error of its ways in letting Siebel leave. Oracle ended up having to acquire Siebel Systems for $5.8 billion. After that, Siebel founded his next company: C3.ai.
Building the AI Industry
After Siebel left Siebel Systems, he took time to think about the next big opportunity. He had practically invented the CRM niche, and Siebel Systems remained the industry leader there at the time of its sale to Oracle. He concluded that artificial intelligence would be the next big thing, and C3.ai came into existence.
Initially, C3.ai focused on industrial enterprise AI applications in specific fields such as energy. Over time, however, C3.ai has broadened its platform. The company is now the global leader in providing Enterprise AI. It has 40 different applications for industries spanning manufacturing, telecommunications, utilities, and aerospace in addition to the company’s original oil and gas niche.
Why This Matters Now
This sort of big data analysis and optimization is absolutely essential going forward. Just look at the supply chain crisis now. Companies can’t even guarantee that they’ll get basic inputs for their factories. As such, it’s increasingly vital to use existing resources to their fullest. Any sort of software that can reduce waste and improve throughput is more crucial than ever.
That’s not all. The focus on environmental, social, and governance (ESG) investing has put efficiency in the forefront. Companies need to reduce their carbon footprints to remain on the right side with investors. Industries such as chemicals, refining, and manufacturing use tremendous amounts of energy and potentially toxic compounds. To the extent that AI and intelligent software can optimize these processes, it makes a big difference in mitigating a dirty industry’s environmental impact.
AI Stock Verdict
C3.ai has had a difficult 2021. This came in big part because of Covid-19. C3.ai on average has huge contracts with clients; think millions of dollars each on many occasions. The contract with Baker Hughes (NYSE:BKR), for example, is for hundreds of millions of dollars just on its own. This isn’t the sort of software that a business would order over a video call during the pandemic.
C3.ai, understandably, had a sales slowdown given that its sales people couldn’t travel to pitch the product in-person. That should start to lift soon, as things return toward normal. That said, C3.ai has been slower in announcing new contracts this year than analysts had hoped for. If that persists, it will be a negative for the growth story going forward.
Still, Tom Siebel has navigated other big industry busts, such as the hangover following the 1999 tech bubble. There’s no reason to think that he can’t get C3.ai back into a hypergrowth phase once the current disruption ends. In the meantime, AI stock has a noteworthy 13% short interest right now. That could set off a major squeeze on positive earnings or any big new contract announcements.
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>>> Cannabis stocks rally on talk of M&A and latest moves toward possible reform of federal ban
MarketWatch
Nov. 8, 2021
By Steve Gelsi
https://www.marketwatch.com/story/cannabis-stocks-rally-on-talk-of-m-a-and-latest-moves-toward-possible-reform-of-federal-ban-11636396460
Cannabis stock get some positive news for a change on talk of deal-making and a Republican-backed bill aimed at legalization
Cannabis stocks posted big gains Monday amid optimism about M&A and federal legalization in a rare burst of energy in the sector that’s been trading mostly lower this year.
On the M&A front, tobacco giant Altria may buy the 55% of Cronos Group that is doesn’t already own, according to speculation from New Cannabis Ventures. The deal would come about three years after Altria paid C$2.4 billion ($1.9 billion) for a 45% stake in Cronos, with an option to buy a controlling stake.
Meanwhile, cannabis received a couple of positive developments on the federal front. Marijuana Moment reported that Rep. Nancy Mace (R-S.C.) is circulating the States Reform Act as a measure to legalize and tax cannabis on a federal level from the Republican side of the aisle.
Cantor Fitzgerald analyst Pablo Zuanic said late Friday the measure “significantly increases the probability of federal level marijuana reform” during the current term.
See Also: Cannabis sector is not banking on help from Congress before 2022 – MarketWatch
Cannabis also got a boost from the passage of the Congressional Infrastructure bill, which includes a proposal allowing cannabis scientists to buy research cannabis from local dispensaries instead of government-produced facilities.
Shares of U.S.-based cannabis companies jumped. The cannabis ETF THCX rose 7.4%, and the AdvisorShares Pure US Cannabis ETF MSOS, +6.15% jumped 10%.
Curaleaf CURA, +11.31% CURLF, +11.64% jumped 7.9% and Trulieve TCNNF, +7.28% advanced by 6.8%. Green Thumb Industries GTBIF, +7.24% rallied 11%, and Verano Holdings VRNOF, +7.36% jumped 8.1%. and Cresco Labs CRLBF, +8.30% rose by nearly 7%.
Among Canadian cannabis companies, Cronos Group CRON, +10.21% jumped 22.5%, Canopy Growth CGC, +12.94% WEED, +12.77% rose 9%, Aurora Cannabis ACB, +12.29% ACB, +12.49% rallied nearly 10% and Tilray Inc. TLRY, +9.11% ran up by 14%.
Most of these stocks remain in negative territory for the year, however, amid talk of oversupply in Canada and other market challenges. Any major moves on legalization on the federal level remained on the back burner, most Washington observers had said.
In a note to clients on Sunday, New Cannabis Ventures analyst Alan Brochstein flagged a missing earnings call announcement from Cronos Group as a potential signal of a material announcement from the company.
“Cronos Group is a large accelerated filer with the SEC, which means its Q3 financials are due on Tues., Nov. 9,” Brochstein said. “Historically, the company has provided investors with at least a week’s advance notice of its conference call, but there has been no call announced yet.”
Brochstein said it’s possible that the lack of notification could mean a deal is brewing, but then went on to say it was just an educated guess.
Either way, shares of Cronos Group remained near a 52-week lows even with Monday’s rally.
Cronos Group did not reply to an email from MarketWatch.
Canopy Growth gets downgrades
With the eye on U.S. developments, attention ebbed on Canadian producer Canopy Growth after its earnings miss on Friday. But the company still faced downgrades from analysts after its latest quarterly results missed projections.
Cowen analyst Vivien Azer cut her rating on Canopy Growth to market perform from outperform and said the company’s turnaround in the Canadian market is taking longer than expected.
CIBC analyst John Zamparo downgraded Canopy Growth to underperform from neutral.
“The primary factors that have supported Canopy’s premium valuation are strong revenue growth, an assumption of eventual market dominance, access to U.S. markets pending legalization, and a robust balance sheet,” he said. “We believe questions exist on all fronts.”
Even with Monday’s gains, shares of Canopy Growth are down 48% this year.
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Calavo - >>> The Cautious Bridge to Investing, and Watching Calavo Growers
You can't live your life in fear as an investor, but you can take steps to protect yourself against the unforeseen.
By JONATHAN HELLER
Sep 14, 2021
https://realmoney.thestreet.com/investing/the-cautious-bridge-to-investing-and-watching-calavo-growers-15767620?puc=yahoo&cm_ven=YAHOO
Its good to be back in the saddle, after a week off for our eldest daughter's wedding. If there's one thing I learned this past weekend, it's that you have to expect the unexpected. Just hours before the wedding, the bridge to the island where it was held was shutdown due to a "suspicious package". That meant no one on or off until it was resolved, which could have made for a reception without any food, or many guests stuck on the other side of the bridge. Thankfully, it was resolved quickly, and all went as planned. Something like that happening was the furthest thing from my mind. I just wanted a great day of celebration, and to make it down the aisle without crying or stumbling.
That got me thinking about investing, and our propensity as investors, myself included, to not consider the worst case, the "black swan" event as it were. You can't live your life in fear as an investor, but you can take steps to protect yourself against the unforeseen. When it comes to company specific risk, position-sizing is huge. I've seen individuals, and managers, that have loaded up on a single name - one where they see so much upside that they become blind to what could go wrong. If and when the hammer drops it's too late. Too much portfolio concentration can make you rich, if you are right, but it can also bankrupt you if you are not. The pain of loss here is a lot greater than the euphoria of scoring big. You never know when the bridge to your island will be shut down.
Elsewhere, while catching up on the past week, I noticed what's been going on with avocado name Calavo Growers (CVGW) . Calavo is somewhat familiar due to its association with citrus name Limoneira (LMNR) . Calavo still packages and distributes LMNR's lemons, oranges and avocados, and owns a stake in the company. Until 2019, LMNR also had a stake in CVGW.
What caught my attention, is the fact that CVGW has been absolutely slammed this year. Shares hit $85 back in March, and closed Monday at $35.39, a seven-year low. Last Thursday shares endured a 17% hit following the release of third quarter earnings. It was likely not the quarterly results per se that caused the damage - revenue of $285 million beat consensus estimates by $6 million, while the 17-cent per share loss was a penny ahead - but rather what the company had to say about guidance. In fact, management is not providing near-term guidance due to "inflationary pressures" on raw materials. That was certainly not what the market wanted to hear, but it is the current reality, and you'll likely be hearing a lot more about inflation.
Ever the dumpster-diver, always on the lookout for situations where it appears that the market has over-punished a name, I am keeping an eye on CVGW, but am not yet convinced there's enough meat on the bone to take a stab at these levels. Shares trade at just under 23x next year's consensus estimates of $1.56/share. Just seven days ago, the consensus was at $2.46 and three months ago it was $2.81.
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>>> Healthcare Services Group - 3 Absurdly Cheap Healthcare Stocks Long-Term Investors Should Consider Buying Right Now
Everyone loves a discount.
Motley Fool
by Jason Hawthorne, Rachel Warren, And Steve Ditto
Aug 24, 2021
https://www.fool.com/investing/2021/08/24/have-500-3-absurdly-cheap-healthcare-stocks-long-t/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Healthcare Services Group : Not every company in the healthcare industry is exciting. Far from the boom or bust world of biotechnology and the innovation of robotic surgeries and gene sequencing is Healthcare Services Group. The company provides laundry and linen services, facility maintenance, and dietary services to healthcare facilities. It serves customers from hospitals to retirement complexes. Housekeeping contributes a little more than half of the company's revenue. But business hasn't been great.
Overall, revenue fell 4.4% in 2020. The decline was due to COVID-19 -- both directly and indirectly. The stock has been beaten up over the last few years, falling 52% since the beginning of 2018. Management expects growth to return beginning next quarter. But investors aren't counting their chickens before they hatch. When Wall Street looks at the company it sees two black eyes that keep the negative sentiment in place, and it has pushed the stock to near its lowest price-to-sales ratio in a decade.
Perhaps the biggest mark against the company is an ongoing investigation by the Securities and Exchange Commission into how it calculated its earnings per share for years. The company received a subpoena in November 2017, but didn't disclose it until March the following year. The company's own internal audit was completed a year after that. Management has said it has been discussing a final resolution to the issue with the agency.
Another concern is its dependence on its largest customer -- a struggling operator of skilled nursing facilities. In the past three years beginning in 2018, that account represented 19.3%, 15.6%, and 14.7% of Healthcare Services' revenue, respectively. In the recently reported second quarter, Healthcare Services Group modified its agreement with the customer. The amended contract reduced revenue but helps keep the customer afloat as it restructures.
On the positive side, Healthcare Services Group offers a steady dividend. The stock currently yields 3.3%. Management has raised the distribution for 72 consecutive quarters. The increases aren't large, but the consistency is nice. What began as a $0.01 payout in the third quarter of 2003 is now almost $0.21 per share. Overall, the dividend has climbed nearly 14% over the past five years.
Investors picking up shares today aren't likely to get rich anytime soon. But Healthcare Services Group is one of the cheapest healthcare stocks in the market. If it can manage through the current uncertainty, it should offer a healthy return for shareholders who can stomach the risk.
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McCormick - >>> 3 Beaten-Down Growth Stocks to Buy in September
It's a great time to dip into these unloved investments.
Motley Fool
by Demitri Kalogeropoulos
8-28-21
https://www.fool.com/investing/2021/08/28/3-beaten-down-growth-stocks-to-buy-in-september/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
McCormick
Several consumer packaged-food stocks have been ignored by Wall Street recently, but McCormick stands out as particularly attractive. Sure, the spice and flavorings specialist isn't putting up huge growth numbers. But its latest 8% sales spike constitutes market share gains in the valuable condiments and flavorings niche. The company is likely to grow faster than peers like PepsiCo and General Mills in 2021, partly thanks to that focus.
McCormick brings other great investment factors to the table, including a rising annual cash flow level that just crossed $1 billion. Margins are improving, too, thanks to increased prices and a flood of innovative product releases. And management has demonstrated a willingness to keep cash payouts rising for this Dividend Aristocrat.
These characteristics lay the groundwork for better overall returns for shareholders, especially those buying at a time when many investors are looking elsewhere for growth.
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Scotts Miracle-Gro - >>> 3 Beaten-Down Dividend Stocks to Buy Right Now
These dividend stocks appear to be poised to bounce back.
Motley Fool
by Keith Speights
8-23-21
https://www.fool.com/investing/2021/08/23/3-beaten-down-dividend-stocks-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
A cannabis supplier facing temporary headwinds
Scotts Miracle-Gro (NYSE:SMG) has been a household name for decades thanks to its consumer lawn and garden products. In recent years, though, the company has also positioned itself as the leading supplier of hydroponics products to the cannabis industry. It offers a reliable dividend that currently yields 1.7%.
The stock is nearly 40% below its high from a few months ago. CEO Jim Hagedorn explained why in Scotts' second-quarter conference call earlier this month, stating that the company was "finally at the inflection point everyone knew was coming."
Hagedorn acknowledged that Scotts faces more challenging year-over-year comparisons. The company's consumer and cannabis businesses soared in 2020 due to the COVID-19 pandemic. However, consumers are now returning to their normal routines.
In addition, Scotts has encountered other headwinds. Hagedorn blamed adverse weather conditions for constraining the company's growth. He noted that snow in some key markets on Mother's Day weekend, which is typically the biggest weekend of the gardening season, hurt sales. Much of the Midwest and the northeast U.S. experienced record cold on Memorial Day. Heat and drought out west negatively affected Scotts' business as well.
The company's margins have also been pressured due to rising commodity prices. Scotts has been affected by higher prices for urea, diesel, and resin. Grass seed prices have also soared.
There's good news, though: These should be temporary issues. Scotts will move past the difficult year-over-year comparisons. The weather won't always be bad. Scotts will be able to pass on higher commodity prices by increasing its own pricing.
Even better, Scotts' growth prospects remain very good. The U.S. cannabis market continues to expand. It's possible that federal cannabis reform could provide an even greater boost to the cannabis industry. Like Brookfield Renewable, Scotts is a beaten-down dividend stock that isn't likely to remain beaten down for too much longer.
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